blackwater usa - united states house committee on ... · (1) blackwater usa tuesday, october 2,...

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON :

For sale by the Superintendent of Documents, U.S. Government Printing OfficeInternet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

45–219 PDF 2008

BLACKWATER USA

HEARINGBEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

OCTOBER 2, 2007

Serial No. 110–89

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.htmlhttp://www.house.gov/reform

VerDate 11-MAY-2000 12:10 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 C:\DOCS\45219.TXT KATIE PsN: KATIE

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

HENRY A. WAXMAN, California, ChairmanTOM LANTOS, CaliforniaEDOLPHUS TOWNS, New YorkPAUL E. KANJORSKI, PennsylvaniaCAROLYN B. MALONEY, New YorkELIJAH E. CUMMINGS, MarylandDENNIS J. KUCINICH, OhioDANNY K. DAVIS, IllinoisJOHN F. TIERNEY, MassachusettsWM. LACY CLAY, MissouriDIANE E. WATSON, CaliforniaSTEPHEN F. LYNCH, MassachusettsBRIAN HIGGINS, New YorkJOHN A. YARMUTH, KentuckyBRUCE L. BRALEY, IowaELEANOR HOLMES NORTON, District of

ColumbiaBETTY MCCOLLUM, MinnesotaJIM COOPER, TennesseeCHRIS VAN HOLLEN, MarylandPAUL W. HODES, New HampshireCHRISTOPHER S. MURPHY, ConnecticutJOHN P. SARBANES, MarylandPETER WELCH, Vermont

TOM DAVIS, VirginiaDAN BURTON, IndianaCHRISTOPHER SHAYS, ConnecticutJOHN M. MCHUGH, New YorkJOHN L. MICA, FloridaMARK E. SOUDER, IndianaTODD RUSSELL PLATTS, PennsylvaniaCHRIS CANNON, UtahJOHN J. DUNCAN, JR., TennesseeMICHAEL R. TURNER, OhioDARRELL E. ISSA, CaliforniaKENNY MARCHANT, TexasLYNN A. WESTMORELAND, GeorgiaPATRICK T. MCHENRY, North CarolinaVIRGINIA FOXX, North CarolinaBRIAN P. BILBRAY, CaliforniaBILL SALI, IdahoJIM JORDAN, Ohio

PHIL SCHILIRO, Chief of StaffPHIL BARNETT, Staff DirectorEARLEY GREEN, Chief Clerk

DAVID MARIN, Minority Staff Director


(III)

C O N T E N T S

PageHearing held on October 2, 2007 ............................................................................ 1Statement of:

Prince, Erik, chairman, the Prince Group, LLC and Blackwater USA ....... 23Satterfield, Ambassador David M., Senior Advisor to the Secretary and

Coordinator for IRAQ, U.S. Department of State; Ambassador RichardJ. Griffin, Assistant Secretary of State, Bureau of Diplomatic Security,U.S. Department of State; and William H. Moser, Deputy AssistantSecretary for Logistics Management, U.S. Department of State .............. 123

Satterfield, Ambassador David M. ........................................................... 123Letters, statements, etc., submitted for the record by:

Davis, Hon. Tom, a Representative in Congress from the State of Vir-ginia, prepared statement of ........................................................................ 15

Griffin, Ambassador Richard J., Assistant Secretary of State, Bureauof Diplomatic Security, U.S. Department of State, prepared statementof ..................................................................................................................... 128

Hodes, Hon. Paul W., a Representative in Congress from the State ofNew Hampshire, information concerning pay ............................................ 104

Lynch, Hon. Stephen F., a Representative in Congress from the Stateof Massachusetts, various e-mails ............................................................... 112

Prince, Erik, chairman, the Prince Group, LLC and Blackwater USA,prepared statement of ................................................................................... 25

Sali, Hon. Bill, a Representative in Congress from the State of Idaho,prepared statement of ................................................................................... 166

Satterfield, Ambassador David M., Senior Advisor to the Secretary andCoordinator for IRAQ, U.S. Department of State, prepared statementof ..................................................................................................................... 125

Watson, Hon. Diane E., a Representative in Congress from the Stateof California, prepared statement of ........................................................... 162

Waxman, Chairman Henry A., a Representative in Congress from theState of California:

Information concerning contracts ............................................................ 70Prepared statement of ............................................................................... 5Majority staff memorandum ..................................................................... 34


(1)

BLACKWATER USA

TUESDAY, OCTOBER 2, 2007

HOUSE OF REPRESENTATIVES,COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.The committee met, pursuant to notice, at 10:12 a.m., in room

2154, Rayburn House Office Building, Hon. Henry A. Waxman(chairman of the committee) presiding.

Present: Representatives Waxman, Davis of Virginia, Maloney,Cummings, Kucinich, Davis of Illinois, Tierney, Clay, Watson,Lynch, Yarmuth, Braley, Norton, McCollum, Cooper, Van Hollen,Hodes, Murphy, Sarbanes, Welch, Burton, Shays, Mica, Platts,Duncan, Turner, Issa, Westmoreland, McHenry, Foxx, Bilbray, andJordan.

Also present: Representative Schakowsky.Staff present: Phil Schiliro, chief of staff; Phil Barnett, staff di-

rector and chief counsel; Kristen Amerling, general counsel; KarenLightfoot, communications director and senior policy advisor; DavidRapallo, chief investigative counsel; John Williams and TheoChuang, deputy chief investigative counsels; Christopher Davis andDaniel Davis, professional staff members; Earley Green, chief clerk;Teresa Coufal, deputy clerk; Matt Siegler, special assistant; CarenAuchman, press assistant; Zhongrui J.R. Deng, chief informationofficer; Leneal Scott, information systems manager; Kerry Gut-knecht, William Ragland, and Miriam Edelman, staff assistants;Russell Anello, counsel; David Marin, minority staff director; LarryHalloran, minority deputy staff director; Jennifer Safavian, minor-ity chief counsel for oversight and investigations; Keith Ausbrook,minority general counsel; John Brosnan, minority senior procure-ment counsel; Steve Castor, A. Brooke Bennett, Ashley Callen, andEmile Monette, minority counsels; Allyson Blandford, minority pro-fessional staff member; Nick Palarino and Larry Brady; minoritysenior investigator and policy advisors; Patrick Lyden, minorityparliamentarian and member services coordinator; Brian McNicoll,minority communications director; and Benjamin Chance, minorityclerk.

Chairman WAXMAN. The meeting of the committee will come toorder.

Over the past 25 years, a sophisticated campaign has been wagedto privatize Government services. The theory is that corporationscan deliver Government services better and at a lower cost thanthe Government. Over the last 6 years, this theory has been putinto practice.


2

The result is that privatization has exploded. For every taxpayerdollar spent on Federal programs, over 40 cents now goes to pri-vate contractors. Our Government now outsources even the over-sight of the outsourcing.

At home, core Government functions like tax collection and emer-gency response have been contracted out. Abroad, companies likeHalliburton and Blackwater have made millions performing tasksthat used to be done by our Nation’s military forces.

What has been missing is a serious evaluation of whether thepromises of privatizing are actually realized. Inside our Govern-ment, it has been an article of faith that outsourcing is best.

Today, we are going to examine the impact of privatization onour military forces. We will focus on a specific example, theoutsourcing of military functions to Blackwater, a private militarycontractor providing protective services to U.S. officials in Iraq.

We will seek to answer basic questions. Is Blackwater, a privatemilitary contractor, helping or hurting our efforts in Iraq? Is theGovernment doing enough to hold Blackwater accountable for al-leged misconduct? What are the costs to the Federal taxpayers?

I want to thank Erik Prince, Blackwater’s founder and CEO, forhis cooperation in this hearing. As a general rule, children fromwealthy and politically connected families no longer serve in themilitary. Mr. Prince is an exception. He enlisted in the Navy in1992 and joined the Navy SEALs in 1993, where he served for 4years.

We thank you for that service.In 1997, he saw an opportunity to start his own company and

created Blackwater. He has said, ‘‘We are trying to do for the na-tional security apparatus what FedEx did for the Postal Service.’’

There may be no Federal contractor in America that has grownmore rapidly than Blackwater over the last 7 years. In 2000,Blackwater had just $204,000 in Government contracts. Since then,it has received over $1 billion in Federal contracts. More than halfof these contracts were awarded without full and open competition.

Privatizing is working exceptionally well for Blackwater. Thequestion for this hearing is whether outsourcing to Blackwater isa good deal for the American taxpayer, whether it is a good dealfor the military and whether it is serving our national interest inIraq.

The first part of that question is cost. We know that sergeantsin the military generally cost the Government between $50,000 to$70,000 per year. We also know that a comparable position atBlackwater costs the Federal Government over $400,000, six timesas much.

Defense Secretary Gates testified about this problem last week.He said, Blackwater charges the Government so much that it canlure highly trained soldiers out of our forces to work for them. Heis now taking the unprecedented step of considering whether to askour troops to sign a non-compete agreement to prevent the U.S.military from becoming a taxpayer-funded training program for pri-vate contractors.

There are also serious questions about Blackwater’s performance.The September 16th shooting that killed at least 11 Iraqis is justthe latest in a series of troubling Blackwater incidents.


3

Earlier this year, our committee examined the company’s mis-takes in Fallujah where four contractors were killed and their bod-ies burned. That incident triggered a major battle in the Iraq War.

New documents indicate that there have been a total of 195shooting incidents involving Blackwater forces since 2005.Blackwater’s contract says the company is hired to provide defen-sive services, but in most of these incidents it was Blackwaterforces who fired first. We have also learned that 122 Blackwateremployees, one seventh of the company’s current work force inIraq, have been terminated for improper conduct.

We have the best troops in the world. The men and women inour Armed Forces are extraordinarily able and dedicated. Their paydoes not reflect their value, but they don’t complain. So I have ahigh bar when I ask whether Blackwater and other private mili-tary contractors can meet the performance standards of our sol-diers.

In recent days, military leaders have said that Blackwater’smissteps in Iraq are going to hurt us badly. One senior U.S. mili-tary official said Blackwater’s actions are creating resentmentamong Iraqis that ‘‘may be worse than Abu Ghraib.’’ If these obser-vations are true, they mean that our reliance on a private militarycontractor is backfiring.

The committee’s investigation raises as many questions aboutthe State Department’s oversight of Blackwater as it does aboutBlackwater itself.

On December 24, 2006, a drunken Blackwater contractor shotthe guard of the Iraqi Vice President. This didn’t happen out on amission protecting diplomats. It occurred inside the protectedGreen Zone.

If this had happened in the United States, the contractor wouldhave been arrested and a criminal investigation launched. If adrunken U.S. soldier had killed an Iraqi guard, the soldier wouldhave faced a court martial, but all that has happened to theBlackwater contractor is that he has lost his job.

The State Department advised Blackwater how much to pay thefamily to make the problem go away and then allowed the contrac-tor to leave Iraq just 36 hours after the shooting. Incredibly, inter-nal emails document a debate over the size of the payment. Thecharge d’affaires recommended a $250,000 payment, but this wascut to $15,000 because the Diplomatic Security Service said Iraqiswould try to get themselves killed for such a large payout.

Well, it is hard to read these emails and not come to the conclu-sion that the State Department is acting as Blackwater’s enabler.

If Blackwater and other companies are really providing betterservice at a lower cost, the experiment of privatizing is working.But if the costs are higher and performance is worse, then I don’tunderstand why we are doing this. It makes no sense to pay morefor less. We will examine this issue today and facts, not ideology,need to guide us here.

Yesterday, the FBI announced that it launched a criminal inves-tigation into Blackwater’s actions on September 16th. This morn-ing, the Justice Department sent a letter to the committee askingthat in light of this development the committee not take testimonyat this time about the events of September 16th.


4

Our precedent on this committee is that Congress has an inde-pendent right to this information but, in this case, Ranking Mem-ber Davis and I have conferred and we have agreed to postponeany public discussion of this issue as we work with the Departmentto obtain the information that the committee lacks. For the samereason, at the request of the Justice Department, I will ask ourwitness, Mr. Prince, and our State Department witnesses on thesecond panel not to discuss the September 16th incident in thispublic setting today.

The last point I want to make is directed to the families of theBlackwater employees killed in Fallujah and the families of the sol-diers killed in a tragic and unnecessary accident with BlackwaterAirline, some of whom are here today.

I know many of you believe that Blackwater has been unaccount-able to anyone in our Government. I want you to know thatBlackwater will be accountable today.

We will be asking some tough questions about disturbing actions,and I also want to assure Mr. Prince that we will be fair and wewill not tolerate any demonstrations or disturbances from anyoneattending this hearing.

Thank you, and I am looking forward to Mr. Prince’s testimony.I want to recognize the ranking member, Mr. Davis.[The prepared statement of Chairman Henry A. Waxman fol-

lows:]


5


6


7


8


9


10


11


12


13

Mr. DAVIS OF VIRGINIA. Thank you, Mr. Waxman.Security contractors have been working at U.S. diplomatic posts

for more than 20 years, but their extensive use in the midst of on-going military conflict raises important new questions about theability of Government acquisition officials to manage and overseethose contracts, the vetting and training of security personnel, andhow best to control and coordinate private security firms in a com-plex, highly dangerous battle space.

Contracts for the use of force in war also pose legitimate ques-tions about the propriety of hiring private firms to perform such apublic, some would say inherently governmental, function. Butthose complex questions won’t be addressed responsibly by fixatingon the operations of any one company nor are we likely to learnmuch by focusing on one sensational incident still under investiga-tion.

So we appreciate Chairman Waxman agreeing to add testimonyfrom State Department witnesses today. They will discuss overallmanagement of the competitively awarded worldwide personnelprotective services contract under which Blackwater and two otherfirms provide security services in Iraq.

We take the chairman at his word, there will be additional hear-ings to examine the broader range of important oversight issuesimplicated in the use of security contractors in hostile environ-ments.

Contractor personnel working in support of diplomatic and mili-tary activities abroad have become an inescapable fact of modernlife. Today, they provide everything from logistics and engineeringservices to food preparation, laundry, housing, construction and, ofcourse, security. They offer invaluable surge capacity and contin-gent capabilities Federal agencies can’t afford to keep in-house.

By some estimates, the number of private contractors now ex-ceeds the total U.S. military personnel in Iraq, but the presence ofso many foreigners, particularly so many with guns, offends someIraqis and gives others a pretext to incite mistrust and violence. Toparaphrase the title of one recent study of the phenomena, Iraqisfear they can’t live with private security contractors. U.S. personnelbelieve they can’t live without them.

So it is critical the Departments of State and Defense get it rightwhen they contract for sensitive security services in someone else’ssovereign territory.

However, you define success in Iraq, from stay the course to im-mediate withdrawal and every scenario in between, security con-tractors are going to play an integral part. The inevitable redeploy-ment of U.S. military units out of the current urban battle spacewill only increase the need for well trained and well managed pri-vate security forces to fill that vacuum and protect diplomatic andreconstruction efforts.

As the lead editorial of this morning’s Washington Post con-cluded, it is foolish to propose the elimination of private securityfirms in Iraq and Afghanistan, at least in the short term.

Contract documents and incident reports reviewed by the com-mittee suggest the State Department is trying to get it right. Thereis clear evidence of proactive management and oversight of securitycontractors in Iraq.


14

The State Department requires specific qualifications and rigor-ous ongoing training for all contract security personnel, includingextensive prior security experience and firearms proficiency. Thosehired must also undergo background investigations and qualify fora security clearance, and the contract contains carefully craftedcomprehensive provisions on standards of conduct for security per-sonnel, strict rules for the use of any type of force and extensivereporting requirements when any incident occurs.

But State Department oversight of security contractors seems tohave some blind spots as well. There is little aggregate or compara-tive data on contractor performance, so it is impossible to know ifone company’s rate of weapon-related incidents is the product of adangerous cowboy culture or the predictable result of conductinghigher risk missions.

Incidents of erratic and dangerous behavior by security personnelfrom all the companies involved, not just Blackwater, are handledwith little or no regard to Iraqi law. Usually, the bad actor is sim-ply whisked out of the country, whether the offense is a civiliancasualty, negligent discharge of a weapon, alcohol or drug abuse,or destruction of property. To date, there has not been a single suc-cessful prosecution of a security provider in Iraq for criminal mis-conduct.

Iraqis understandably resent our preaching about the rule of lawwhen so visible an element of the U.S. presence there appears tobe above the law. That is why the events of September 16thsparked such an outcry by the Iraqi government which seesunpunished assaults on civilians as a threat to national sov-ereignty.

The incident is also being used by those seeking to exploit accu-mulated resentments and draw attacks on private contractors, aforce even the Iraqi government concedes is still a vital layer of se-curity.

Given that volatile environment, we should take care not to pre-judge the ongoing investigations into events of that day.

Published eyewitness statements provide very contradictory ac-counts, but this much we know: Standard operating procedures forpersonnel security details dictate getting protected persons in U.S.vehicles away from an incident as quickly as possible. No one staysto secure the scene or to help frightened civilians. That is not theirjob.

So we may never know who or how many shot first. In the timeit takes to hide an AK–47, murderous insurgents and corrupt Iraqipolice can be transformed into martyred civilians.

We need to look at the proper role of security contractors in awar zone, not through the clouded lens of one company or one cer-tain incident but with a clear eye and objective view of what bestserves the interest of U.S. personnel in theater and U.S. taxpayersat home.

I look forward to that discussion.[The prepared statement of Hon. Tom Davis follows:]


15


16


17

Chairman WAXMAN. Thank you very much, Mr. Davis.While the rules do not provide opening statements for all Mem-

bers at a hearing, Mr. Davis and I have consulted about this, andI would like to ask unanimous consent that we have four Memberson each side designated by the chairman and the ranking memberto be permitted to give a 2-minute statement.

When we begin the questioning, we will begin with 10 minutescontrolled by the chairman and 10 minutes controlled by the rank-ing member.

I would further like to ask unanimous consent that JanSchakowsky, who is not a member of this committee, be permittedto join us at this hearing today. Is there any objection to this unan-imous consent request?

If not, that will be the order.I would like to now call on for 2 minutes, it would be Mr. Tierney

for his statement.Mr. TIERNEY. Thank you, Mr. Chairman.Mr. Chairman, the fundamental question here ought to be

whether or not it makes sense to contract out in the first place. Wereally need to evaluate our use of private military contractors todetermine what roles are appropriate or not for private firms andwhat must be kept in control of those in uniform or those in publicservice.

The all-voluntary professional force after the Vietnam War em-ployed the so-called Abrams Doctrine. The idea was that wewouldn’t go to war without the sufficient backing of the Nation.

Outsourcing has circumvented this doctrine. It allows the admin-istration to almost double the force size without any political pricebeing paid. We have too few regular troops and if we admitted thatand tried to put in more, the administration would have to admitit was wrong in the way it prosecuted this war originally. It wouldhave to recognize the impact on drawing forces out of Afghanistan.

If we call up even more National Guards or Reservists, then itwould cause even more of a protest among the people in this coun-try that are already not sold on the Iraq venture. If we relied moreon our allies, they would have to share the power, share the deci-sionmaking and share the contract work. So private contractorshave allowed, essentially, this administration to add additionalforces without paying any political capital.

Very little conversation goes into the number of people dedicatedto their jobs in the private sector that are being killed or injuredon a regular basis. Figures by one account are some nine individ-uals a week losing their lives in the service of private contractingthat are not counted in the figures of casualties reported to theAmerican people.

Outsourcing, as you indicated, Mr. Chairman, seems to increasethe costs, not decrease the costs, and I hope we get into the num-bers on that as the hearing goes on. It seems to be harming thevery counterinsurgency effort that General Petraeus seems to wantto implement, and we have far too few Government managers tooversee the situation.

We need more accountability. We need to clarify and update ourlaws. We need to restore the Government’s ability to manage anysuch contracts. We need to punish corporations that commit fraud


18

or undermine our security. Basically, we need to reconsider whichjobs should be private and which jobs should remain in the publicsector.

Thank you, Mr. Chairman.Chairman WAXMAN. Thank you, Mr. Tierney.The Chair would like to now recognize Mr. McHenry for 2 min-

utes.Mr. MCHENRY. Thank you, Mr. Chairman.While we are the investigative committee of Congress, I believe

it is irresponsible, when an ongoing investigation in the executivebranch is trying to establish the facts of the September 16th event,that we call before this committee, contractors involved with that.Establishing those facts are included in those two ongoing inves-tigations, and I believe it is irresponsible for us to convict beforethe executive branch has first established the facts of what didoccur with the Blackwater incident in Baghdad.

Blackwater has protected dozens, if not hundreds, of Members ofCongress including myself and members of this committee whenthey travel to Afghanistan and Iraq. I, for one, am grateful fortheir service. Not one single Member of Congress has been injurednor killed under Blackwater protection, and for that I am grateful.

Let me be clear. We should not speculate on the actions of themen on September 16th. Those facts are not yet established. Weneed to get the facts on the record on these contradicting reportsthat are coming from media sources.

Much is not clear. We have conflicting media reports written byreporters who were not present for the events. We do not yet havean authoritative report from the executive branch based on eye-witness accounts.

Today, we should be reviewing the rules of contracting, inves-tigating whether companies are following the rules, the legal rami-fications and whether the system of contracting should be modifiedand improved. These are the issues that we should be dealing withtoday.

Patience is a virtue when it comes to investigating something asserious as the loss of human life. We all abhor the loss of anyhuman life. Justice must be served.

With thousands of soldiers, diplomats and contractors riskingtheir lives in such a dangerous region of the world, we should exer-cise patience in this process and allow the ongoing investigationsto come to a conclusion and establish clear facts before we com-plicate this process with a kneejerk congressional hearing. Let’sdeal in solid facts, not simply follow the front page stories and thedictates of trial lawyers which this committee, it appears, has doneover the last 9 months.

Chairman WAXMAN. The gentleman’s time has expired.Mr. MCHENRY. Again, contracting is the liberal cause du jour,

and we should move past that and ensure we have proper Govern-ment service.

Thank you.Chairman WAXMAN. Mrs. Maloney, you are recognized for 2 min-

utes.


19

Mrs. MALONEY. Thank you, Chairman Waxman and RankingMember Davis for holding today’s hearing to examine the heavy re-liance upon private security contractors in Iraq and Afghanistan.

There have been troubling reports about incidents involvingBlackwater where Iraqi civilians have been killed, and there havebeen many, many troubling reports.

Today, we are basically going to examine the privatization of themilitary. What are the costs and what are the consequences ofprivatizing our military?

Blackwater guards are highly trained and, in some cases, havebeen brave, yet they make six times more than our own military.Coming from a military family where my father served in WorldWar II and my brother in Vietnam, I do not believe that theBlackwater guards are any more brave or more committed or moredisciplined or more effective than the American Armed Services.

So our basic question—mine is today—is why are we using thisservice, contracting out, privatizing our military to an organizationthat has been aggressive and, I would say in some cases, recklessin the handling of their duties?

There are many questions we have on accountability and basi-cally why are we doing this. We were told that we were going tocontract out these security services to save the Government money,but in fact it is costing significantly more to pay Blackwater thanit would for our own military to perform these duties, and their ac-tions have really undermined our effectiveness in Iraq.

Thank you.Chairman WAXMAN. Time has expired.Mr. Burton, you are recognized for 2 minutes.Mr. BURTON. Thank you, Mr. Chairman.I have no objection to this kind of a hearing. What really con-

cerns me is that there appears to be a rush to judgment, and Idon’t think that should happen. It is going to be thoroughly inves-tigated in Iraq by Iraqis and American officials. Until we get that,we won’t know exactly what happened or who might have made amistake or who might have done something they shouldn’t havedone.

While the hearing here is OK, I hope everybody, including themedia, will know that this is not the final report on this. There isgoing to be a complete investigation.

I would like to give you a few facts. There have been 3,073 mis-sions in the last 9 months over there by private contractors. Therewere 77 involving them using weapons.

There have been 54,000 recorded attacks, 6,000 a month, andthere have been a lot of these contractors who have lost their lives.Since 2004, there have been 42 security contractors killed and 76have been wounded.

This is a time when we should reevaluate or evaluate the proce-dures that are being used over there. If we find, after the investiga-tion, there have been errors in judgment or somebody made adownright conscious mistake, then things need to be changed.

I would just like to say one more time, it is important to havethese hearings. Congress needs to know what went on over there,but there should not be a rush to judgment.


20

I would like to say one other thing. There has not been one Con-gressman or one public official that has been killed while under theprotection of these people, and that should account for something.

With that, Mr. Chairman, I yield back my time.Chairman WAXMAN. The gentleman’s time has expired.The Chair now recognizes Mr. Cummings.Mr. CUMMINGS. Thank you very much, Mr. Chairman.In light of the last statement that was just made, it is not about

Blackwater and what they did or they may have done some goodthings. The question is whether there is accountability.

Blackwater, we have to question in this hearing whether it cre-ated a shadow military of mercenary forces that are not account-able to the U.S. Government or to anyone else. Blackwater appearsto have fostered a culture of shoot first and sometimes kill andthen ask the questions. Blackwater has been involved in at least195 escalation of force incidents since 2005, an average of 1.4shooting incidents per week.

We must seriously reassess whether these practices are under-mining our ability to accomplish our mission in Iraq.

We must also reassess how Blackwater not only affects our mis-sion in Iraq but also how it may negatively affect our foreign rela-tions efforts in the Middle East. These same neighboring statesthat we need to utilize as vehicles to spur multilateral and bilat-eral support as to create a political reconciliation in Iraq.

This is about accountability, and I am going to be very interestedto hear what Mr. Prince has to say about that accountability.

With that, Mr. Chairman, I yield back.Chairman WAXMAN. The gentleman yields back his time.The Chair recognizes Mr. Issa for 2 minutes.Mr. ISSA. Thank you, Mr. Chairman.I think it has been made incredibly clear by the previous state-

ments on the Democrat side that this is not about Blackwaterwhen they talk about being paid six times as much, when they talkabout the President shouldn’t have gone into this war, when theytalk about, they talk about.

What we are hearing today is, in fact, a repeat of theMoveOn.org attack on General Petraeus’ patriotism. What we areseeing is that except for the 79 Members who voted against de-nouncing MoveOn.org, 8 of whom are on the dais here today, whatwe are seeing is what they couldn’t do to our men and women inuniform, they will simply switch targets.

The bodies were not cold in Iraq before this became a story worthgoing after here in committee.

The second panel today will include people from the State De-partment who will tell us about the command and control rules,about whether or not Blackwater made mistakes, whether they didtheir job and whether they are going to be continued as a contrac-tor. That is appropriate.

I am not here to defend Blackwater, but I am here to defendGeneral Petraeus and the men and women in uniform who do theirjob, who were first denounced by MoveOn.org, then not denouncedby Members of Congress, many of whom are on the dais today,speaking as though they don’t support attacking in every possibleway the administration’s war in Iraq.


21

We are going to get to the bottom of what happened on Septem-ber 16th, but quite frankly when we are done with that, we arestill going to have the same problem with all due respect to theMembers on the other side of the aisle. We do not want militaryguarding State Department personnel. There is a long tradition, infact, of very limited military guarding of even our embassies, a lim-ited amount of Marines.

The fact is the State Department has a surge responsibility inIraq and Afghanistan. They are meeting it with private contractors.When that ends, do we really want to have 1,500 Special Ops peo-ple working for the State Department in career positions?

I look forward to the debate on that and not on whether this warwas ill-founded which has been the Democrats’ mantra.

Chairman WAXMAN. The gentleman’s time has expired.The Chair would now turn to Mr. Kucinich for 2 minutes.Mr. KUCINICH. Mr. Chairman, a British polling agency has deter-

mined that more than one million Iraqi citizens have died as a re-sult of the Iraq War. Opinion Research Business found that thedeath rate rose to almost one in two households in Baghdad havelost a family member since the invasion began in 2003. This reportconfirms the results of a survey released last fall by Lancet, theprestigious medical magazine which gave a conservative estimateof 650,000 innocent civilian deaths.

Now this great human tragedy is taking place in many forms. Intoday’s hearing. We are investigating Blackwater’s outrageous be-havior that has killed countless innocent Iraqis, and I am deeplyconcerned that the Department of State appears to have attemptedto cover up Blackwater’s killings rather than seek appropriate rem-edies.

What are the implications of killing an innocent Iraqi? What isthis Government’s position on killing of innocent Iraqis by a U.S.citizen?

If war is privatized and private contractors have a vested inter-est in keeping the war going, the longer the war goes on, the moremoney they make. Eighty-four percent of the shooting incidents in-volving Blackwater are where they fired first, and Blackwater didnot remain at the scene. So Blackwater’s shoot first and don’t askquestions later approach undermines the U.S.’ position and jeop-ardizes the safety of our soldiers.

How much more do we need to know to conclude that the waragainst Iraq has been a disaster for the Iraqi people and for thepeople of this country as well?

I yield back.Chairman WAXMAN. The gentleman yields back his time.All opening statements have been concluded.Oh, excuse me, there is one more, Mr. Mica for 2 minutes.Mr. MICA. Thank you.Well, let me try to frame the context of this hearing. I have been

on the committee for some 15 years. From the outset, the Democratside on the majority have tried to discredit the President. In fact,I have a quote from a press release from Chairman Waxman, Janu-ary 10th: As part of President Bush’s revised strategy appears forIraq, he appears likely to propose giving large sums of taxpayer


22

dollars to decrepit and possibly corrupt state-owned Iraqi compa-nies.

So we started first in these hearings to try to discredit the Presi-dent. We have tried to discredit the Ambassador. We have tried todiscredit the Secretary of Defense. We did a great job in trying todiscredit the military here, and then we worked on the Iraqi gov-ernment.

Now we are down to some of the contractors. So this is the hear-ing to discredit them.

Probably one of the reasons why there is some bad news for theother side today. It is on page 15. It is a 48 percent drop in deathsin Iraq in 1 month. They want that good news to get out, but onthe front page, you want the other killings by Blackwater, the con-tractors we are going after today.

Now if they are really intent on going after the contractors, andI don’t know what happened on the 16th. I don’t know what hap-pened in other incidents.

But if they are really intent on going after criminal misconduct,then we have a letter from the Department of Justice. We havesome words about not interfering in this process, but we are inter-fering with both a Department of State investigation and a crimi-nal misconduct investigation, potentially criminal charges.

Let me quote from some of the words: This presents serious chal-lenges for any potential criminal prosecution, and then they citecase law.

So my concern, if we really want to do this, we should not beholding this hearing. Therefore, I move that the committee do nowadjourn.

Chairman WAXMAN. The motion is before us to adjourn.All those in favor of the motion, say aye.[Chorus of ayes.]Chairman WAXMAN. Opposed, no.[Chorus of noes.]Chairman WAXMAN. The noes have it and the motion is defeated.We have a witness now, and I would like to call forward Erik

Prince who is the head of the Prince Group, LLC and BlackwaterUSA.

Mr. Prince, please come forward.Mr. Prince, it is the practice of this committee that all witnesses

take an oath before they testify, if you will please raise your righthand.

[Witness sworn.]Chairman WAXMAN. The record will indicate that the witness an-

swered in the affirmative.I do want to say, Mr. Prince, that there have been press reports

over the past 2 weeks regarding the recent incident on September16th, and there have been conflicting accounts of what actuallyhappened on the ground.

I know that you had prepared to address this incident today asdid our other witnesses and no doubt our Members did too. So Ijust want to note that for the record that the request to refrainfrom public comment came from the Justice Department, not Mr.Prince and not from anyone else, and I want to thank him for com-plying with that Justice Department request.


23

I know you had been prepared to talk about it, but we would askyou please not to go into that incident.

Mr. PRINCE. Yes, sir, I would be more than happy to.Chairman WAXMAN. Before you begin, just push the button the

mic.Mr. PRINCE. Is that better?Chairman WAXMAN. Yes. OK, please proceed however you see fit.

STATEMENT OF ERIK PRINCE, CHAIRMAN, THE PRINCEGROUP, LLC AND BLACKWATER USA

Mr. PRINCE. Chairman Waxman, Congressman Davis, membersof the committee, my name is Erik Prince, and I am the chairmanand CEO of the Prince Group and Blackwater USA.

Blackwater is a team of dedicated professionals who providetraining to America’s military and law enforcement communitiesand risk their lives to protect Americans in harm’s way overseas.Under the direction and oversight of the U.S. Government,Blackwater provides an opportunity for military and law enforce-ment veterans with a record of honorable service to continue theirsupport to the United States.

Words alone cannot express the respect I have for these bravemen and women who volunteer to defend U.S. personnel, facilitiesand diplomatic missions. I am proud to be here to represent themtoday.

After almost 5 years in active service as a U.S. Navy SEAL, Ifounded Blackwater in 1997. I wanted to offer the military and lawenforcement communities assistance by providing expert instruc-tion and world-class training venues. Ten years later, Blackwatertrains approximately 500 members of the U.S. military and law en-forcement agencies every day.

After 9/11, when the United States began its stabilization effortsin Afghanistan and then Iraq, the U.S. Government called uponBlackwater to fill the need for protective services in hostile areas.Blackwater responded immediately. We are extremely proud of an-swering that call and supporting our country.

Blackwater personnel supporting our country’s overseas missionsare all military and law enforcement veterans, many of whom haverecent military deployments. No individual protected byBlackwater has ever been killed or seriously injured. There is nobetter evidence of the skill and dedication of these men.

At the same time, 30 brave men have made the ultimate sacrificewhile working for Blackwater and its affiliates. Numerous othershave been wounded and permanently maimed. The entireBlackwater family mourns the loss of these brave lives. Ourthoughts and our prayers are with their families.

The areas of Iraq in which we operate are particularly dangerousand challenging. Blackwater personnel are subject to regular at-tacks by terrorists and other nefarious forces within Iraq. We arethe targets of the same ruthless enemies that have killed morethan 3,800 American military personnel and thousands of innocentIraqis.

Any incident where Americans are attacked serves as a reminderof the hostile environment in which our professionals work to keepAmerican officials and dignitaries safe, including visiting Members


24

of Congress. In doing so, more American service members areavailable to fight the enemy.

Blackwater shares the committee’s interest in ensuring the ac-countability and oversight of contract personnel supporting U.S. op-erations. The company and its personnel are already accountableunder and subject to numerous statutes, treaties and regulations ofthe United States. Blackwater looks forward to working with Con-gress and the executive branch to ensure that any necessary im-provements to these laws and policies are implemented.

The Worldwide Personal Protection Services Contract, which hasbeen provided to this committee, was competitively awarded anddetails almost every aspect of operations and contractor perform-ance including the hiring, vetting guidelines, background checks,screening, training standards, rules of force and conduct standards.

In Iraq, Blackwater reports to the embassy’s regional security of-ficer or RSO. All Blackwater movements and operations are di-rected by the RSO. In conjunction with internal company proce-dures and controls, the RSO ensures that Blackwater complies withall relevant contractual terms and conditions as well as any appli-cable laws and regulations.

We have approximately 1,000 professionals serving today in Iraqas part of our Nation’s total force. Blackwater does not engage inoffensive or military missions but performs only defensive securityfunctions.

My understanding of the September 16th incident is that the De-partment of State and the FBI are conducting a full investigation,but those results are not yet available. We at Blackwater welcomethe FBI review announced yesterday, and we will cooperate fullyand look forward to receiving their conclusions.

I just want to put some other things in perspective. A recent re-port from the Department of State stated that, in 2007, Blackwaterhas conducted 1,873 security details for diplomatic business to theRed Zone, areas outside the Green Zone in Iraq, and there havebeen only 56 incidences in which weapons were discharged or lessthan 3 percent of all movements.

In 2006, Blackwater conducted over 6,500 diplomatic movementsin the Red Zone. Weapons were discharged in less than 1 percentof those missions.

To the extent there is any loss of innocent life ever, let me clearthat I consider that tragic. Every life, whether American or Iraqi,is precious. I stress to the committee and to the American public,however, that I believe we acted appropriately at all times.

I am prepared to answer your questions.[The prepared statement of Mr. Prince follows:]


25


26


27


28


29


30


31


32


33

Chairman WAXMAN. Thank you very much, Mr. Prince.I am going to start off with the questions.The issue before us that I see that is important to understand

is we have gone now in a major way to contract out what the Gov-ernment and what the military ordinarily would do.

Your company started off at the beginning of 2001 with, I think,around over $200,000 in Government contracts. You now are mak-ing over $1 billion a year. That is quite a success. Even if I amwrong on the exact numbers, it is quite a success.

Now we are paying a lot of money for privatized military to dothe work that our military people have done, and no one does thiswork better than the U.S. military. They are a very able and braveand courageous people that do a fantastic job for us.

So the question in my mind is are we paying more and gettingless?

In asking that question, I want to focus on a particular incident.That incident received almost no public attention but involved thetragic loss of three of our troops, and my staff has reviewed thedocuments describing the incident. They prepared a memo which Iwould like, without objection, to make part of the record.

[The information referred to follows:]


34


35


36


37


38


39


40


41


42


43


44


45


46


47


48


49


50


51

Chairman WAXMAN. On November 27, 2004, there was a planerun by Blackwater Aviation that crashed into a wall of a canyonin the mountains of Afghanistan. This plane was carrying threemilitary personnel, three active duty U.S. personnel: LieutenantColonel Michael McMahon, Chief Warrant Officer Travis Grogan,and Specialist Harley Miller.

About 40 minutes after takeoff, Blackwater 61 crashed into thewall of a canyon and all the occupants were killed. The crash wasinvestigated by a joint Army and Air Force taskforce and by theNational Transportation Safety Board.

The NTSB report found that Blackwater captain and first officerbehaved unprofessionally and were deliberately flying the non-standard route low through the valley for fun. The report foundthat the pilots were unfamiliar with the route, deviated almost im-mediately after takeoff and failed to maintain adequate terrainclearance.

They also had a transcript of the cockpit voice recording, and onthis recording the flight crew joked with each other, saying, ‘‘Youare an X-wing fighter Star Wars man and you are,’’ expletive‘‘right. This is fun.’’

The captain stated, ‘‘I swear to God they wouldn’t pay me if theyknew how much fun this was.’’

Mr. Prince, one allegation raised recently about Blackwater’s ac-tions is that your contractors have acted irresponsibly. One seniorU.S. commander told the Washington Post ‘‘They often act like cow-boys.’’

Let me ask you about that crash of Blackwater Flight 61. In thiscase, did Blackwater’s pilots act responsibly or were they, in thewords of the U.S. commander, acting like cowboys?

Mr. PRINCE. I disagree with the assertion that they acted likecowboys. We provide a very reliable, valuable service to the AirForce and the Army in Afghanistan. Anytime you have an accident,it is an accident. Something could have been done better.

It is not a Part 135 U.S. type flying operation. There are no flightservices. There are no flight routes. There are no nav aids. It istruly rugged Alaska-style bush flying.

Chairman WAXMAN. Well, the investigators said from the Na-tional Transportation Safety Board that Blackwater Aviation vio-lated its own policies by assigning two pilots without adequate fly-ing experience in Afghanistan. According to the military report, itwas your policy, Blackwater policy, that required at least one of thepilots to have flown in theater for at least a month, but neitherpilot had flown for that long and neither had flown the route theywere assigned that day.

This is clear in the cockpit voice recording. Right after takeoff,the Blackwater captain said, ‘‘I hope I am going into the right val-ley.’’

The first one replied, ‘‘This one or that one?’’The captain then apparently guessed which valley to fly, saying,

‘‘I am just going to go up this one.’’The flight mechanic later observed, ‘‘We don’t normally go this

route.’’


52

Why didn’t Blackwater follow its own policies and team two newpilots with more experienced ones? Why did you have two inexperi-enced pilots together?

Mr. PRINCE. I am not qualified to speak to the experience levelof the pilots. I will tell you that we are operating under militarycontrol. In fact, the aircraft was set to take off with two passengersonboard, and they actually turned around for the lieutenant colonelwho I believe who boarded late.

There was also it violated. The military violated its policy byloading both ammunition. That aircraft is also flying with a largenumber of illumination mortar rounds, and they are not supposedto mix pax and cargo. But, again, we followed our customer’s in-structions.

Yes, accidents happened. We provided thousands and thousandsof flight hours of reliable service since then. Today still, we are fly-ing more than 1,000 missions a month.

Chairman WAXMAN. But on that one, the investigators foundthat Blackwater failed to follow standard precautions to trackflights, failed to file a flight plan, failed to maintain emergencycommunications in case of an accident, and tragically these failuresmay have cost the life of the crash’s sole survivor because one ofthe military people that you were escorting or your flight was es-corting evidently survived for at least 10 hours after the crash.

He suffered internal injuries, but he got out of the plane to uri-nate. He smoked a cigarette. He rolled out a sleeping bag. Nobodycame, and then he died of cold from inattention. There was no way,as required, for anybody to know where that plane had landed eventhough that is a requirement.

I have an email that I want to read to you. It was sent on No-vember 10, 2004, 16 days before the crash. It is from Paul Hooper,Blackwater Afghanistan site manager, and it was sent to JohnHite, vice president for operations for Blackwater Aviation.

In it, Mr. Hooper says, Blackwater knowingly hired pilots withbackground and experience shortfalls.

Here is what he wrote: ‘‘By necessity, the initial group hired tosupport the Afghanistan operation did not meet the criteria identi-fied in email traffic and had some background and experienceshortfalls overlooked in favor of getting the requisite number ofpersonnel on board to startup the contract.’’

One of the great ironies of this accident is that while the aircraftwas being piloted by an inexperienced Blackwater pilot, a skilledmilitary pilot with an exemplary safety record, Lieutenant ColonelMichael McMahon was on board the flight as a passenger.

This is what his widow wrote to me. She is Colonel JeanetteMcMahon, and she works at West Point.

She said, ‘‘Mike, like Mr. Prince, was a CEO of sorts in the mili-tary as an aviation commander and as such had amassed a greatsafety record in his unit. It is ironic and unfortunate that he hadto be a passenger on this plane versus one of the people responsiblefor its safe operation. Some would say it was simply a tragic acci-dent . . . but this accident was due to the gross lack of judgmentin managing this company.’’

Mr. Prince, Colonel McMahon is asking why the taxpayersshould be paying your company millions to conduct military trans-


53

port missions over dangerous terrain when the military’s own pilotsare better trained and a lot less expensive. How do you respond?

Mr. PRINCE. We were hired to fill that void because there is adifferent—it is a different kind of airlift mission going in and outof the very short strips in Afghanistan. You have high altitude,short strips, unimproved runways, and you have transport aircraftthat are designed to support a large conventional battle.

We are doing small missions. The typical CASA payload maxesout at 4,000 pounds. They can’t even hold that because of the shortaltitude or the high altitude short strips, they have to go in andout of, hauling mail, hauling parts.

We are filling that gap because these strips are too small for C–17s. They are too small for C–130’s. They are going in and out ofplaces that the military can’t get to with existing aircraft theyhave. That is why we are doing that mission.

Chairman WAXMAN. You are saying that the military could notdo this job?

Mr. PRINCE. They did not have the assets to do it in theater orback in the United States, no, sir.

Chairman WAXMAN. They could have acquired those assets, how-ever. Instead, they hired you.

Mr. PRINCE. I believe the Congress has seen fit to proceed withsome sort of aircraft acquisition program to fill that void going for-ward, but this is a temporary service to fill that gap.

Chairman WAXMAN. Well, we have been in Iraq for 5 years now.The pilots of Blackwater 61 paid for their errors with their lives,but I am wondering whether there was any corporate accountabil-ity for Blackwater. Were any sanctions placed on the company afterthe investigative reports that were so critical of Blackwater werereleased?

Mr. PRINCE. Anytime there is an accident, a company also shouldbe introspective and look back and see what can be done to makesure that it doesn’t happen again.

Chairman WAXMAN. Aside from your introspection, were you everpenalized in any way? Were you ever fined or suspended or rep-rimanded or placed on probation?

Mr. PRINCE. I believe the Air Force investigated the incident, andthey found that it was. It was pilot error. It was not due to cor-porate error that caused the mistake or that crashed the aircraft.

Chairman WAXMAN. My time is up, but the corporation hired in-experienced pilots. They sent them on a route they didn’t knowabout. They didn’t even follow your own rules. It seems to me thatit is more than pilot error. There ought to be corporate responsibil-ity, and Blackwater was the corporation involved.

Aside from your introspection, you have just been awarded a newcontract for almost $92 million. I want to see whether you are get-ting a stick as well as all these carrots.

Mr. Davis, your turn.Mr. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.Let me just say I think if there is a question if they should be

in or out, if the private companies are doing work of the Army, thatreally ought to be addressed by the Defense Department and StateDepartment.

Mr. ISSA. Mr. Chairman.


54

Mr. Ranking Member, would you yield for a question?Mr. DAVIS OF VIRGINIA. I would.Mr. ISSA. Since I wasn’t here during the Clinton administration,

did Mr. Waxman and this committee investigate Secretary Brown’scrash in which he was killed?

That was a military flight, C–130, I believe. Was that inves-tigated?

Mr. DAVIS OF VIRGINIA. I wasn’t here. I was not here at thatpoint, but I understand the question.

Mr. ISSA. So crashes happen bad weather and in combat.Chairman WAXMAN. Will the gentleman yield to me?That crash was investigated, and the gentleman would be able

to get the report of that investigation.Mr. DAVIS OF VIRGINIA. Let me yield 5 minutes to the gentleman

from North Carolina.Mr. MCHENRY. I thank the ranking member for yielding.Mr. Prince, can you describe to the committee the nature of your

contract, who your client is in Iraq?Mr. PRINCE. In Iraq, we work for the Department of State.Mr. MCHENRY. What is the service you provide for the Depart-

ment of State?Mr. PRINCE. We operate under the Worldwide Personal Protec-

tive Services Contract, and we are charged with protecting dip-lomats, reconstruction officials and visiting CODELs, Members ofCongress and their staffs.

Mr. MCHENRY. In this calendar year, how many missions haveyou had in Iraq?

Mr. PRINCE. 1,873.Mr. MCHENRY. How many incidents occurred during those 1,873

movements?Mr. PRINCE. Only 56 incidents.Mr. MCHENRY. A movement is, for instance, a Member of Con-

gress lands at the airstrip. They are transported to the embassy.That is one movement.

Mr. PRINCE. Yes, sir.Mr. MCHENRY. All right, and 56 incidents out of 1,873 move-

ments in a war zone, is that correct?Mr. PRINCE. Resulted in a discharge of one of our guys’ weapons.Mr. MCHENRY. Those 56 incidents, does that mean that they shot

at someone? Describe what an incident is.Mr. PRINCE. Yes. We don’t even record all the times that our

guys receive fire. The vehicles get shot at on a daily basis, multipletimes a day. So that is not something we even record.

In this case, an incident is a defensive measure. You are re-sponding to an IED attack followed by small arms fire.

Most of the attacks we get in Iraq are complex, meaning it is notjust one bad thing; it is a host of bad things. Car bomb followedby small arms attack. RPGs followed by sniper fire.

An incident occurs typically when our men fear for their life.They are not able to extract themselves from the situation. Theyhave to use sufficient defensive fire to off the X, to get off thatplace where the bad guys have tried to kill Americans that day.

Mr. MCHENRY. So in 1,873 missions, 56 incidents occurred whichmeans potentially the Blackwater individual, the former soldier in


55

most cases, discharges a weapon. Perhaps in the air, is that a pos-sibility?

Mr. PRINCE. It is not likely into the air. It is either going to bedirected at someone that is shooting at us or another real problem.You know the recent Washington Post series on IEDs in Iraq,81,000 IED attacks.

The bad guys have figured out how to make a precision weapon.You take a car. You pack it with explosives, and you put a suicidalperson in there that wants to drive into the back of a convoy andblow themselves up.

Mr. MCHENRY. An additional question here, those 56 incidentspretty much all involved returning fire. A caravan is being shot at,for instance, and you would return fire or a potential car bomb iscoming at you and you are returning.

Mr. PRINCE. A potential car bomb, yes. Defensive fire or potentialcar bombs going, potentially coming near you, you have to warnthem off.

There is a whole series in the use of force continuum that ourguys are briefed and they abide by. They are briefed on it throughtheir training back here in the United States.

Every time they leave the wire, every time they launch on thatmission, before they go in the morning, they get the mission briefon what they are going to do, who they are protecting, where theyare going, the intelligence, what to be on the lookout for, wherehave there been particularly bad areas in the city and the use offorce continuum, those rules of engagement.

Mr. MCHENRY. The use of force continuum, is that dictated bythe Department of State?

Mr. PRINCE. Yes.Mr. MCHENRY. You use their rules of engagement, the commonly

used term?Mr. PRINCE. Yes, sir.Mr. MCHENRY. That is similar to the Department of Defense

rules of engagement.Mr. PRINCE. Yes, they are essentially the same.Mr. MCHENRY. OK. So you had 1,800.Mr. PRINCE. Sorry, Department of Defense rules for contractors.

We do not have the same as a U.S. soldier at all.Mr. MCHENRY. OK. In the report that I have, in 2006, you had

6,254 missions and 38 incidents.Mr. PRINCE. Yes, sir.Mr. MCHENRY. Which means one of the contractors, one of the

former soldiers, who is now in State Department Protective Serv-ice, they returned fire. So that would be less than 1 percent of mis-sions involved returning fire.

The question here, how long has Blackwater been involved inIraq? How long have you had this contract in Iraq?

Mr. PRINCE. We started there first working for DOD under theCPA, and then I believe in 2005 it transitioned from CPA over toDepartment of State.

Mr. MCHENRY. How many individuals under your protectiveservice have been injured or killed?

Mr. PRINCE. Twenty-seven dead and hundreds wounded.Mr. MCHENRY. How many individuals?


56

Mr. PRINCE. Oh, under our care?Mr. MCHENRY. Under your care that you are protecting.Mr. PRINCE. Zero.Mr. MCHENRY. Zero?Mr. PRINCE. Zero, sir.Mr. MCHENRY. Zero individuals that Blackwater has protected

have been killed in a Blackwater transport.Mr. PRINCE. That is correct.Mr. MCHENRY. Zero?Mr. PRINCE. Zero.Mr. MCHENRY. That is, I think, the operable number here. Your

client is the State Department. The State Department has a con-tract with you to provide protective service for their visitors, for in-stance, CODELs, Ambassadors and runs the gamut, and you havehad zero individuals under your care and protection killed.

Mr. PRINCE. Correct.Mr. MCHENRY. I think that is a very important number that we

need to discuss here, Mr. Chairman, and that should be a testa-ment to the service that these former veterans, these veterans thatare currently working for Blackwater.

Chairman WAXMAN. The 5 minutes that was yielded to you isover.

Mr. MCHENRY. I am happy to yield back to the ranking member.Mr. DAVIS OF VIRGINIA. Mr. Prince, let me just continue with

that. Are there any other security firms in Iraq that provide theservices that involve as much danger as your escort services thatyour company provides in Baghdad?

Mr. PRINCE. Sir, we certainly have a high profile mission. Weprotect the U.S. Ambassador. We protect all the diplomats in thegreater Baghdad area which is the hottest part of the country byfar.

Mr. DAVIS OF VIRGINIA. How is your firm paid under the currenttask order contract for security details? Is it by the mission, by thehour or some other method?

How do you bill the Government?Mr. PRINCE. It is generally billed on a per man day for every day

that the operator is in the country.Mr. DAVIS OF VIRGINIA. Is it a cost plus fee or is it just like a

time and materials?Mr. PRINCE. It is blended. Most of it is firm fixed price. There

are a few things that are directly cost reimbursable like insurance.Mr. DAVIS OF VIRGINIA. Does the contract provide for monetary

penalties for any performance difficulties like shooting incidentsthat were reported to have occurred and the like?

Mr. PRINCE. Yes, there are sorts of penalty clauses, if we don’thave it fully manned, if they are not happy with the leadership. Weare very responsive. If there is someone that doesn’t agree or is notoperating within the standards of the Department of State, theyhave two decisions, window or aisle.

Mr. DAVIS OF VIRGINIA. Do you work just for the Department ofState or do you work for the Defense Department as well?

Mr. PRINCE. In Iraq, we essentially work for the Department ofState. There are one or two folks here or there in a consultant typeposition but nothing, nothing significant, nothing armed.


57

Mr. DAVIS OF VIRGINIA. It is important for the committee to un-derstand there are two different contracting entities that are con-tracting in Iraq, and you work for State.

Do you think the contract provisions and the State Departmentcontract management personnel provide sufficient guidance for theuse of force under the contract?

Mr. PRINCE. Yes, sir. We have seen the full gamut of contractingand contract management in the stabilization section or stabiliza-tion phase of the Iraq War, and there is a whole host of differencesin oversight.

I will tell you the State Department is the highest. They are theGE-like buyers, the most sophisticated oversight standards that wehave to comply with on the front end for our personnel and man-agement in the field.

Mr. DAVIS OF VIRGINIA. When your teams are operating on theground in Baghdad, what entity has the authority to control youractivities? Is it the State Department or is it the military com-mander who is responsible for the battle space?

Mr. PRINCE. We work for the RSO, the regional security officer.He is the chief security official for the State Department in Iraq.

Mr. DAVIS OF VIRGINIA. So it is the State Department ultimatelyfor whom you are contracting.

Mr. PRINCE. Yes.Mr. DAVIS OF VIRGINIA. Can you describe the process that is fol-

lowed under the contract when a shooting incident occurs?Have you dismissed any employees for shooting incidents under

your security contracts in Iraq and what happens to dismissed em-ployees? Are they sent out of Iraq?

Mr. PRINCE. OK, let me answer the last one first.If there is any sort of discipline problem, whether it is bad atti-

tude, a dirty weapon, riding someone’s bike that is not his, we firethem. We hold ourselves internally accountable, very high. We firethem. We can fine them, but we can’t do anything else.

So if there is any incidents where we believe wrongdoing is done,we present that incident, any incident, any time a weapon is dis-charged, there is an incident report given to the RSO.

Mr. DAVIS OF VIRGINIA. Any idea how many employees you havefired over the time?

Mr. PRINCE. I think in the committee’s report, they said 122 orsomething over.

Mr. DAVIS OF VIRGINIA. So you have taken action when it hascome to your attention.

Mr. PRINCE. Say again, sir.Mr. DAVIS OF VIRGINIA. So you have taken action when it has

come to your attention.Mr. PRINCE. It generally comes to our attention first. We as a

company, we fire them. We send the termination notice to theState Department as to why we fired someone.

Mr. DAVIS OF VIRGINIA. Thank you.Chairman WAXMAN. The gentleman’s time has expired.Mrs. Maloney for 5 minutes.Mrs. MALONEY. Thank you, Mr. Chairman.I would like to ask you, Mr. Prince, about one of these employees

whom you fired, and this was an employee who got drunk on


58

Christmas Eve of 2006. According to documents that we got yester-day from the State Department, this particular man, while he wasdrunk, shot and killed the guard to the Iraqi Vice President, obvi-ously causing great tensions between the Iraqi government and theU.S. military.

I would like to ask you about his firing. You fired this individualfor handling a weapon and for being intoxicated, is that right?

Mr. PRINCE. The men operate with a clear policy. If there is tobe any alcohol consumed, it is 8 hours between any time of con-sumption of alcohol.

Mrs. MALONEY. Was he fired or not?Mr. PRINCE. Excuse me?Mrs. MALONEY. Was he fired?Mr. PRINCE. Oh, yes, ma’am, he was fired.Mrs. MALONEY. Have any charges been brought against him in

the Iraqi justice system?Mr. PRINCE. I don’t believe in the Iraqi justice system. I do be-

lieve. I know we referred it over to the——Mrs. MALONEY. Justice Department, they told us they are still

looking at it 9 months later.Have any charges been brought against him in the U.S. military

justice system?Mr. PRINCE. I don’t know.Mrs. MALONEY. Have any charges been brought against him in

the U.S. civilian justice system?Mr. PRINCE. Well, that would be handled by the Justice Depart-

ment, ma’am. That is for them to answer, not me.Mrs. MALONEY. Other than firing him, has there been any sanc-

tion against him about any Government authority?You mentioned you fined people for bad behavior. Was he fined

for killing the Iraqi guard?Mr. PRINCE. Yes, he was.Mrs. MALONEY. How much was he fined?Mr. PRINCE. Multiple thousands of dollars, I don’t know the exact

number. I will have to get you that answer.Mrs. MALONEY. OK.Mr. PRINCE. Look, I am not going to make any apologies for what

he did. He clearly violated our policies.Mrs. MALONEY. OK. All right. Every American believes he vio-

lated policies. If he lived in America, he would have been arrested,and he would be facing criminal charges. If he was a member ofour military, he would be under a court martial. But it appears tome that Blackwater has special rules. That is one of the reasonsof this hearing.

Now, within 36 hours of the shooting, he was flown out of Iraq.Did Blackwater arrange for this contractor to leave Iraq less than2 hours after the shooting?

Mr. PRINCE. I do not believe we arranged for him to leave after2 hours after the shooting. He was arrested.

Mrs. MALONEY. OK, what about 2 days? It was 2 days after theshooting.

Did Blackwater arrange for him to leave the country?Mr. PRINCE. That could easily be.Mrs. MALONEY. OK.


59

Mr. PRINCE. IZ Police arrested him. There was evidence gath-ered. There was information turned over to the Justice Departmentoffice in Baghdad. We fired him. He certainly didn’t have a job withus.

Mrs. MALONEY. Well, in America, if you committed a crime, youdon’t pack them up and ship them out of the country in 2 days.

If you are really concerned about accountability, which you testi-fied in your testimony, you would have gone in and done a thor-ough investigation. Because this shooting took place within theGreen Zone, this was a controllable situation. You could have gonein and done forensics and all the things that they do, but the re-sponse was to pack him and have him leave the country within 2days.

I would like to ask you, how do you justify sending him awayfrom Iraq when any investigation would have only just begun?

Mr. PRINCE. Again, he was fired. The Justice Department was in-vestigating. In Baghdad, there is a Justice Department office there.

He didn’t have a job with us anymore. We as a private companycannot detain him. We can fire, we can fine, but we can’t do any-thing else. The State Department——

Mrs. MALONEY. What evidence do you have that the Justice De-partment was investigating him at that time?

Mr. PRINCE. From talking to my program management people inthe country, they said it is in the hands of the IZ Police, which isAir Force, arrested him. They took him in for questioning. It washandled by the Justice Department.

He was fired by us. The State Department ordered.Mrs. MALONEY. Well, it has been 10 months, and the Justice De-

partment has not done anything to him. Again, I repeat, if he wasa U.S. citizen or in America, he would have been arrested imme-diately. He would have faced criminal charges.

We know about the chain of command in the military. They arecourt-martialed immediately.

But if you work for Blackwater, you get packed up and you leavewithin 2 days and you face a $1,000 fine.

So I am concerned about accountability and really the unfairnessof this, and I am concerned about how Blackwater—if I could justsay, Mr. Chairman—your actions may be undermining our missionin Iraq and really hurting the relationship and trust between theIraqi people and the American military.

Chairman WAXMAN. The gentlelady’s time has expired.Mr. Burton.Mr. BURTON. Can you tell us, Mr. Prince, how many people wit-

nessed the incident she just referred to?Mr. PRINCE. I don’t believe anyone did, sir.Mr. BURTON. So the only people who were involved was the man

who was shot and your employee?Mr. PRINCE. Yes, sir.Mr. BURTON. Can you, in some detail, go into the rules of engage-

ment?I have talked to some of the people at State Department about

this, and I have talked to people within your organization. As I un-derstand it, on the back of every one of your vehicles, in both Ara-


60

bic and English, there is a warning to not get 100 meters of thatvehicle, is that correct?

Mr. PRINCE. Yes, that is right, sir.Mr. BURTON. If somebody is coming at your vehicle at a high rate

of speed, do your employees have any actions that they should takeespecially if it might be a car bomb or something like that?

Mr. PRINCE. Yes, sir. There are generally lights and sirens on thevehicles, air horn. The personnel, whose security sector is facingback toward that oncoming threat, will be giving hand signals, au-dible yelling, stop, qif, Arabic for stop.

There is a pin flare, which is a signaling device kind of like abottle rocket. It is the device used for a pilot to signal his where-abouts on the ground to be rescued, but it is a bright incendiarydevice that flies by the vehicle or it hits the vehicle. It is not lethalat all, but definitely you know something is happening.

Water bottles are sometimes thrown at vehicles to warn them off.If you have to go beyond that, they take shots into the radiator.

You hear that hitting the car. It disables the car. Definitely, youknow something is happening.

If they go beyond that, they spider the windshield. You put around through the center of the windshield away from the occu-pants so that the safety glass in the windshield makes it difficultto see through.

Only after that do they actually direct any shots toward the driv-er. So there is a whole use of force continuum.

Mr. BURTON. The questions that I have heard today from theother side indicate that there ought to be perfection in your organi-zation. Now you are a Navy SEAL, and you served in the military.Do you believe that any kind of military operation of this type orany type can be absolutely perfect all the time?

Mr. PRINCE. I am afraid not, sir. We strive for perfection. We tryto drive toward the highest standards, but the fog of war and acci-dents and the bad guys just have to get lucky once.

Mr. BURTON. I think it is very important that everybody who isinvolved in this hearing today understand that you have high pub-lic officials, Congressman and others, whom you have to protect,and you have indicated that nobody has been killed or hurt underyour protection. Yet, you are going through all kinds of zoneswhere there are car bombs going off, small arms fire, cars comingat you at high rates of speed.

Can you explain to me why in the world there wouldn’t be someprecautions taken when those sorts of things take place?

Mr. PRINCE. Again, the bad guys have figured out killing Ameri-cans is big media, I think. They are trying to drive us out. Theytry to drive to the heart of American resolve and will to stay there.

So we have to provide that protective screen. We only play de-fense, and our job is to get those reconstruction officials, those peo-ple that are trying to weave the fabric of Iraq back together, to getthem away from that X, the place where the bad guys, the terror-ists, have decided to kill them that day.

Mr. BURTON. One of the Members on the other side indicatedthat when there is a firefight or when there is a car bomb goingoff or something, there is an attack on your convoy, that you don’tstay there.


61

Can you explain to me what would happen if you stayed therewhen you were under attack?

Mr. PRINCE. Again, there would be a lot more firefight. Therewould be a lot more shooting.

Our job is to get them off the X. The X is what we refer to inour business about the preplanned ambush site where bad guyshave planned to kill you. So our job is to get them away from thatX, to get them to a safe place. So we can’t stay and secure the ter-rorist crime scene investigation.

Mr. BURTON. You are in a war zone.Mr. PRINCE. Yes, sir.Mr. BURTON. So, the instructions, I want to get this straight. If

your people come under fire or there is a car bomb or RPG firedat them, they are supposed to turn around under some rules andget out of there to protect the people that they are guarding.

Mr. PRINCE. Yes, sir, defensive fire, sufficient force to extricateourselves from that dangerous situation. We are not there toachieve firepower dominance or to drive the insurgents back. Weare there to get our package away from danger.

Mr. BURTON. Thank you.Chairman WAXMAN. The gentleman’s time has expired.The Chair now recognizes Mr. Cummings for 5 minutes.Mr. CUMMINGS. Mr. Prince, you are a very impressive witness.

I just want to ask you a few questions that cause me some concernthat seems to go counter to some of the things that you have said.

I am wondering whether Blackwater is actually helping our mili-tary or hurting them. Frankly, I am concerned that the ordinaryIraqi may not be able to distinguish military actions from contrac-tor actions. They view them all as American actions.

Now I want to go back to this incident that we have been talkingabout for the last few minutes, the 2006 Christmas Eve incidentwhere the drunken Blackwater official shot and killed a guard ofthe Iraqi Vice President, which is basically like killing a SecretService person guarding our Vice President.

When this incident first happened, an Arab television station ranan incorrect story, saying that a ‘‘drunken U.S. soldier’’ killed theIraqi Vice President’s guard.

Were you aware of this incorrect press report?Mr. PRINCE. No, sir, I was not.Mr. CUMMINGS. Of course, you can see how a media report like

that makes it more likely that Iraqis will blame the U.S. militaryrather than Blackwater for the killing of the Iraqi Vice President’sguard. Again, what if it were our Vice President?

Did Blackwater take any steps to inform the press that it wasactually a Blackwater employee who killed the Vice President’sguard?

Mr. PRINCE. By contract, we are not allowed to engage with thepress.

Mr. CUMMINGS. All right, and why is that?Mr. PRINCE. That is part of the stipulations in the WPPS con-

tract.Mr. CUMMINGS. After this report aired, an official who works for

you—and this is what really concerns me and I just want to knowyour reaction to this—at Blackwater sent an email.


62

This is an employee of yours sent an email internally to some ofhis colleagues. He did not suggest contacting the station, I guess,for the reason you just said. He didn’t suggest putting out a pressrelease, and he didn’t suggest correcting the false story in any way.

Instead, this is what the email said: ‘‘At least the ID of the shoot-er will take the heat off of us,’’ meaning Blackwater.

In other words, he was saying: Wow, everyone thinks it was themilitary and not Blackwater. What great news for us. What a sil-ver lining.

Mr. Prince, you said in your testimony that Blackwater is ex-tremely proud of answering the call and supporting our country.Did anyone in your organization ever raise any concerns that alying, a false story to continue might lead to retaliation or insur-gent activity against our troops?

Mr. PRINCE. I don’t believe that false story lasted in the mediafor more than a few hours, sir.

Mr. CUMMINGS. But the fact still remains that it was a falsestory, and we are trying to be supportive of the Iraqi government,trying to get this reconciliation, trying to make sure that they, asPresident Bush says, that they stand up so that we can standdown.

But, at the same time, when these stories are put out—I thinkyou would agree—that the Iraqi people then say, well, wait aminute, the United States is supposed to be supporting our Govern-ment.

President Bush talks about how we have gone over to export de-mocracy. Here is the very symbol. The Vice President of a country,killed by a drunken Blackwater employee.

The question is then what lies in the mind of the Iraqi? Whatlies in the minds of those people who may have wanted to cooper-ate with our security over there?

Then they say, well, wait a minute, if they, U.S. soldiers, butreally Blackwater is doing this to the very Government that we aresupposed to be supporting. Then what does that say and whyshould we support the United States? Fair question?

Mr. PRINCE. Yes, sir. Look, I am not going to make any apologiesfor the——

Mr. CUMMINGS. I am not asking you to make any apologies. Youare the president of this company, is that right?

Mr. PRINCE. The CEO.Mr. CUMMINGS. CEO, well, you are the top guy. You are one of

the top guys, is that right?Mr. PRINCE. Pretty much, yes, sir.Mr. CUMMINGS. All right. So I am just asking you a question

about what your policies are. That is all.Mr. PRINCE. We have clear policies. Whether the guy was in-

volved in a shooting that night or not, the fact that he violated thealcohol policy with firearms would have gotten him fired on thespot. That is why we fire people. We hold them independently ac-countable.

The guy slipped away from the party. He was by himself. I amconfident that if he had been with another guy from Blackwater,the other guy would have stopped him and said, enough. You know.


63

Mr. CUMMINGS. So contrary to what Mr. Burton said, this wasafter hours in the Green Zone, wasn’t it? This wasn’t some mission,was it?

Mr. PRINCE. Correct.Mr. CUMMINGS. Right.Mr. PRINCE. He was on his own time. It was a Christmas Eve

party.Mr. CUMMINGS. Do you understand what I mean? I have heard

not a lot of complimentary things about what you all are doing. Iam sure you are doing a great job, but it is not about what youdo well. It is a question of when things go wrong, where is the ac-countability?

Mr. PRINCE. And, sir, we fired him. We fined him. But we, as aprivate organization, can’t do any more. We can’t flog him. We can’tincarcerate him. That is up to the Justice Department. We are notempowered to enforce U.S. law.

Mr. CUMMINGS. Do you think more should be done?Mr. PRINCE. I would be happy to see further investigation and

prosecution by the Justice Department, yes, sir.Mr. CUMMINGS. Thank you.Chairman WAXMAN. I am going to call Mr. Mica next.How much did you fine him?Mr. PRINCE. Multiple thousands of dollars, sir. I don’t know the

exact number, but whatever we had left due him in pay, I believewe withheld and plus his plane ticket.

Chairman WAXMAN. Thank you.Mr. Mica.Mr. MICA. Thank you.Mr. Prince, in your testimony earlier, you said, ‘‘Killing Ameri-

cans, I guess, in Iraq is big media.’’You said that?Mr. PRINCE. Yes, sir.Mr. MICA. Did you have any idea that wounding American con-

tractors in a congressional hearing would be this big media?Mr. PRINCE. More than I bargained for, sir, yes.Mr. MICA. I described you are here because you are sort of in the

chain of command to be attacked next by some folks who want todiscredit what you are doing. I might say that I don’t know if therewere criminal acts committed, and there will probably be ways inwhich we can go after folks. One of those would be to have the De-partment of Justice pursue the case. Would that be the normal pro-cedure?

Mr. PRINCE. Yes, sir. We welcome it. We encourage it. We wantthat accountability. We hold ourselves internally accountable, butyou know we put 1,000 guys out in the field. Humans make mis-takes and they do stupid things sometimes. We try to catch thoseas much as we can, but if they go over the line.

Mr. MICA. Well, they criticized you. I guess we could start withthe pilots and the NTSB investigation. They should go back andlook at the Comair crash in Kentucky with the accounts of the pi-lots which was a distraction and led to the crash according to theirfindings. I have chaired the Aviation Subcommittee and followedthat very closely.


64

Basically, as Al Gore would put it, there is no controlling author-ity for airspace in Afghanistan.

Mr. PRINCE. There is no FAA in Afghanistan.Mr. MICA. Then you were criticized, too. You left the pilot. I

guess he survived but was not found. Is that it?Mr. PRINCE. No. There were two of the DOD personnel in back

survived the crash.Mr. MICA. Survived, OK. Well, two survived and weren’t found,

and I guess they perished.Mr. PRINCE. They perished before they were found.Mr. MICA. I guess in the United States, like we have an experi-

enced pilot like Fossett. He is lost. Have we found him yet?Mr. PRINCE. No, sir.Mr. MICA. OK, but this is in the terrain.Mr. PRINCE. Terrain very similar to what is in Nevada.Mr. MICA. I just want to try to put things in perspective.There is also some argument that you cost the Government too

much and that you are getting paid too much and maybe this issomething that the military should be doing. Could you respond tothat?

Mr. PRINCE. Yes, sir. I think there are three arguments for oragainst privatization. There is reliability, there is accountability,and there is cost.

Accountability issues can be handled by exercising MEJA. Con-gress expanded MEJA at the end of 2004 to any DOD contingencyoperation, I believe. So any time a U.S. contractor is abroad, theycan be brought up on charges on behalf of the U.S. Government.They can be brought up on charges back here in the States.

There is reliability. That comes down to, I think, individual ven-dor reliability. How well does that company execute? Are they com-plete, correct and on time?

And then there is cost. The American automotive industry, anymanufacturer in America has to deal with that cost issue all thetime, whether they should make something. It is that make versusbuy argument.

I greatly encourage Congress to do some true activity-based coststudies. What do some of these basic Government functions reallycost? Because I don’t believe it is as simple as saying, well, thissergeant costs us this much because that sergeant doesn’t show upthere naked and untrained. There are a whole bunch of other coststhat go into it.

So, figure out if the Army does the job, how many of those peopleleave the wire every day? What is their tooth to tail ratio? Howmany people are operators versus how many people are supportpeople? That all drives into what your total cost is.

Now American industry got pushed by the Japanese car makersand you know by foreign competitors because you have to focus oncost and being efficient in delivering a good or a product or a serv-ice at a better competitive price.

Mr. MICA. Finally, you were criticized for not detaining someonewho committed a criminal act. Now if an employee commits acriminal act in the United States, and you fire him, are you respon-sible in the United States for detaining him and handling?


65

Mr. PRINCE. Well, that would be a crime that we committed thenbecause we are not allowed to detain.

Mr. MICA. You are not allowed to detain?Mr. PRINCE. No, sir.Mr. MICA. OK. So, in that situation, you were criticized for pro-

viding someone transport back. Was it to the United States?Mr. PRINCE. It was.Mr. MICA. Or wherever.Mr. PRINCE. We acquired an airline ticket for him back to the

States. That is all by direction of the State Department.Chairman WAXMAN. The gentleman’s time has expired.Now the Chair recognizes Mr. Kucinich.Mr. KUCINICH. Thank you very much, Mr. Chairman.In my opening remarks, I pointed out that if war is privatized,

private contractors have a vested interest in keeping the war going.The longer the war goes on, the more money they make.

I want to, for my time here, explore the questions regarding howBlackwater got its contracts.

Mr. Prince, your company has undergone a staggering growthjust over the past few years. The committee’s attention can be di-rected to the chart. In 2000, your company was bringing in onlyabout $200,000 in Government contracts but since then, accordingto the committee, you have skyrocketed to something in the natureof $1 billion in Government contracts.

The real increase in Blackwater’s contracts began with the IraqWar. In fact, if you look at the chart, you can see how from 2004on, the amount of taxpayer dollars Blackwater was awarded by theadministration began to go through the roof from about $48 millionin 2004 to $350 million in 2005 to over $500 million last year.

This is really an unprecedented rate of increase, and I want tounderstand how this happened, Mr. Prince.

We have been informed that one of your first contracts in Iraqwas for the Coalition Provisional Authority. Ambassador PaulBremer awarded you a contract to protect officials and dignitaries.That was at the end of 2003, toward the end of 2003. It may havebeen in August. Is that right, sir?

Mr. PRINCE. I believe it happened right after the U.N. facility inBaghdad was blown up by a large truck bomb. Yes, sir, they thenfeared for the U.S. officials.

Mr. KUCINICH. Now that contract was no-bid, is that right, sir?Mr. PRINCE. It was off the GSA schedule.Mr. KUCINICH. Can you tell us how you got this no-bid contract?Mr. PRINCE. Off the GSA schedule is considered a bid contract,

sir. The GSA schedule is a pre-bid program kind of like catalogueof services that you put out, like buying something from the Searscatalog.

Mr. KUCINICH. Did you talk to anyone in the White House aboutthe contract?

Mr. PRINCE. No, sir.Mr. KUCINICH. Did you talk to anyone in the Congress about the

contract?Mr. PRINCE. No, sir.


66

Mr. KUCINICH. Did anyone, to your knowledge, connected withBlackwater talk to anyone in either the White House or the Con-gress about the contract?

Mr. PRINCE. Not to my knowledge, no.Mr. KUCINICH. Did anyone in the DeVos Family talk to anyone

in the White House or the Congress about the contract?Mr. PRINCE. No.Mr. KUCINICH. As a taxpayer, do you think it is proper that no

other companies were allowed to bid?Mr. PRINCE. That, I am not aware of, sir. It is a requirement,

Government officials had. They came to us, asked if it could be ful-filled. I don’t know what other companies they went to as well. Iam not aware of that.

Mr. KUCINICH. In 2004, the State Department awardedBlackwater a $332 million task order under its diplomatic protec-tion contract. Are you familiar with that?

Mr. PRINCE. I am familiar about the amount. I know that wetransitioned over to working for the State Department from theCPA. I am not sure exactly when that happened.

Mr. KUCINICH. Thank you, sir.According to the Federal Contracting Data base, you didn’t have

to compete for that one either, is that correct?Mr. PRINCE. Again, I believe they continued that off the GSA

schedule which is an approved contracting pre-bid method.Mr. KUCINICH. Who at the State Department were you dealing

with in order to get this contract?Mr. PRINCE. I don’t know. I presume it was under the diplomat.Mr. KUCINICH. Excuse me?Mr. PRINCE. It was under the Diplomatic Security Service. That

is the folks at State we were working for.Mr. KUCINICH. Now SIGIR reported that this was a no-bid con-

tract. Was SIGIR incorrect? It was a no-bid contract or not?Mr. PRINCE. I am not sure how they are defining bid or no-bid.

In my understanding, they used, we used pricing off the GSAschedule, and I believe that is considered, regarded as a biddablecontract.

Chairman WAXMAN. Will the gentleman yield to me?Mr. KUCINICH. I yield to the Chair.Chairman WAXMAN. It is on the GSA schedule. Did they come to

you to put your offer of services on the GSA schedule? Did you goto them? How did that get on the GSA schedule?

Mr. PRINCE. Oh, most companies in our kind of work have a GSAschedule. We have a GSA schedule for target systems. We have aGSA schedule for——

Chairman WAXMAN. So you offered services and you are on thelist of services that they can purchase?

Mr. PRINCE. Yes, sir.Chairman WAXMAN. You don’t know if anybody was on the list

for these kinds of services?Mr. PRINCE. Oh, I am sure there are lots of companies that are.Chairman WAXMAN. For some of the services.Did you go to anyone else or did anyone else from the Govern-

ment go to you to ask you to do the work?Mr. PRINCE. I don’t know, sir.


67

Chairman WAXMAN. Did they ask you to see if you could put to-gether this operation and then they put you on the schedule?

Mr. PRINCE. I would say we were present in the country already.We already had significant presence with the CPA under a bid con-tract. I believe that contract was called Security Services Iraq. Sowe had a large presence of static guards and PSD kind of work forthem.

So I think they probably just wanted to transition from DODwork to Department of State work.

Chairman WAXMAN. Thank you.Mr. Shays.Mr. SHAYS. Thank you, Mr. Chairman.Mr. Chairman, I didn’t make an opening statement. I was chair-

man of the National Security Subcommittee and ranking member,and so I have a keen interest in this issue, but other Members hadimportant statements to make. So, first, I would like to make anobservation.

I want to align myself with the statement of Tom Davis, myranking member now. I thought it adequately and perfectly ex-presses my view.

I want to thank both the chairman and Mr. Davis for honoringU.S. Department of Justice’s request not to discuss an incident wedon’t have enough facts to discuss, and we will deal with that later.I think that is responsible.

I think this hearing, the way we are dealing with it, is a veryimportant effort, given what we are doing.

Now, saying that, during the Vietnam War, I was a conscientiousobjector. I was a Peace Corps volunteer, so I try to be very carefulwhen I evaluate the performance of men and women under fire.Frankly, many of those behind you at this desk are exactly that.We are behind a desk, never been shot at, never tried to under-stand what it is like to be under fire.

Blackwater, I want to say, has a reputation of being a bit of acowboy, but I know we absolutely need protective security contrac-tors. The role of security contractors is much different than the roleof the military.

But I also want to say that I feel that the State Departmentcould do a better job of enforcing and holding contractors account-able, and I think they are going to make a point that they are will-ing to have this reviewed by an outside party and then have uslook at it.

Now, saying that, I also want to say the number of times thatyou all have to protect Members of Congress is infinitesimal com-pared to all the civilians you have to protect.

One of the outrages, in my judgment, is that there haven’t beenmore Members who have gone there and, frankly, that some Mem-bers who have never been there are passing judgment on what weare doing there. They are behind a desk with no sense of what ishappening there.

I am in awe of what your men and women and they have beenmostly men, have done to protect our civilians. I am absolutely inawe of it. You know you can’t be perfect, but in one way you havebeen perfect if this is true.


68

Tell me, from June 2004 to the end of that year, how many mis-sions you protected or let me say it this way, if you don’t know howmany missions you protected, how many people you protected werewounded or killed in 2004?

Mr. PRINCE. No, sir, we have never had anyone seriously injured.Mr. SHAYS. I am going to do year by year. Did you have anyone

wounded or killed in 2004?Mr. PRINCE. No, sir.Mr. SHAYS. Did you have anybody wounded or killed in 2005?Mr. PRINCE. No, sir.Mr. SHAYS. These are the people you are trying to protect.Mr. PRINCE. I mean wounded, yeah. A big IED ruptured an ear-

drum. That is the most serious level there.Mr. SHAYS. Did you have anyone wounded or killed in 2006?Mr. PRINCE. People that we were protecting?Mr. SHAYS. Yes.Mr. PRINCE. No.Mr. SHAYS. Did you have anyone who was wounded or killed in

2007 that you were to protect?Mr. PRINCE. No, sir.Mr. SHAYS. That is a perfect record, and you don’t get any credit

for it for some reason.Now, were any of your people killed in 2004, trying to protect the

civilians?Mr. PRINCE. Yes, sir.Mr. SHAYS. Were any of your people killed in 2005, trying to pro-

tect civilians?Mr. PRINCE. Yes, sir.Mr. SHAYS. Were any of your people killed in 2006, trying to pro-

tect civilians?Mr. PRINCE. Yes, sir.Mr. SHAYS. Were any of your people killed by trying to protect

the civilians in 2007?Mr. PRINCE. Yes, sir.Mr. SHAYS. Every year, you have had men who have risked their

lives and who have been killed, fulfilling their mission, and theyhave succeeded 100 percent, and I just want to be on record asthanking you for an amazing job that you do.

I have been to Iraq 18 times. I have been outside the umbrellafour times. It is one dangerous place. I have seen films where vehi-cles come up to our troops or to our security people, and they areblown up in it.

You have done an amazing task, and there is a huge differencefrom being a police officer or protective and being the military, atotally different role.

I have had no one in the military say to me, I want to guard allthese civilians. The last thing you want is to have humvees andArmy take civilians who are meeting other civilians like our StateDepartment with that kind of precedent, and the military wouldnot do it. They are not going to be in a Suburban. They are goingto be in what their protocol requires.

The protocol is totally different. We need security people who dotheir job.


69

Thank you for doing a perfect job in protecting the people you arerequired to protect.

I yield back.Mr. PRINCE. Thank you, sir. It is an honor to do the work.Chairman WAXMAN. The gentleman’s time has expired.Before I recognize Mr. Davis, I want to put in the record, a state-

ment from the Special Inspector General in Iraq from July 2004,that indicates that the security guards and two helicopters forBremer, sole source directed; the security for inner ring RepublicanPresidential compound, Al Rashid Hotel, sole source; the securityfor Al-Rashid Hotel, sole source to Blackwater.

Mr. SHAYS. I reserve my right to object. Would the gentlemansay was that under Bremer or after Bremer?

Chairman WAXMAN. This is in 2004. It would have been Bremer.Mr. SHAYS. So it was under Bremer, not since we transferred

power to the Iraqis.Chairman WAXMAN. I don’t know the answer to that. This docu-

ment only refers to the period of time.Mr. SHAYS. Under Mr. Bremer. I don’t object.[The information referred to follows:]


70


71

Mr. RYAN. Mr. Chairman, may I have minute, please? May Ihave a minute, please? One minute, please?

Chairman WAXMAN. Yes.Mr. PRINCE. Thank you, sir.Chairman WAXMAN. Thank you.Mr. Davis.Mr. DAVIS OF ILLINOIS. Thank you, Mr. Chairman.Mr. Prince, throughout your testimony and in other comments

attributed to you, you have praised the Blackwater personnel onthe ground in Iraq, but mistakes do, in fact, happen. You do admitthat Blackwater personnel have shot and killed innocent civilians,don’t you?

Mr. PRINCE. No, sir. I disagree with that.I think there have been times when guys are using defensive

force to protect themselves, to protect the package they are tryingto get away from danger. There could be ricochets. There are trafficaccidents. Yes. This is war.

You know since 2005, we have conducted in excess of 16,000 mis-sions in Iraq and 195 incidences with weapons discharged. In thattime, did a ricochet hurt or kill an innocent person? That is en-tirely possible.

Again, we do not have the luxury of staying behind to do thatterrorist crime scene investigation to figure out what happened.

Mr. DAVIS OF ILLINOIS. Well, according to a document we ob-tained from the State Department on June 25, 2005, Blackwaterguards shot and killed an innocent man who was standing by theside of the street. His death left six children alone with no one toprovide them support.

Are you familiar with this incident?Mr. PRINCE. I am somewhat familiar with that incident.I believe what happened, it was a car bomb or a potential car

bomb had rapidly approached our convoy. I believe our guys shotrounds at the car, not at the driver, to warn them off. One of thoserounds, as I understand, penetrated through the far side of the car,ricocheted and injured that innocent or killed that innocent man.

Mr. DAVIS OF ILLINOIS. Well, again, according to the State De-partment document, this was a case, ‘‘involving the PSD personnelwho failed to report the shooting, covered it up and subsequentlywere removed from Al-Hillah.’’

The State Department described the death as ‘‘the random deathof an innocent Iraqi.’’

Do you know why Blackwater officials failed to report this shoot-ing and later tried to cover it up?

Mr. PRINCE. I can clarify that fully, sir. Thanks for asking thatquestion.

There was no cover-up because our people reported it to theState Department. They did look into the shooting and the jus-tification of it, and it was deemed to be an appropriate use of force.The man was fired because he had tried to cover it up. He panickedand had asked the other team members to cover it up and to notreport it.

We discovered that through our, I mean our policy worked. Wereported the incident to the State Department, and that is why youfolks have it in the committee because we fired the guy. He was


72

terminated not for an inappropriate shooting but for not followingthe reporting procedure.

Mr. DAVIS OF ILLINOIS. Well, was there any reason this reportwas not provided to the committee?

Mr. PRINCE. I don’t know, sir. I will have to. I will look into thatand get back to you.

Mr. DAVIS OF ILLINOIS. Well, the same document states that theState Department contacted Blackwater headquarters to encourageyou to offer this man’s family, compensation. After this shooting ofan innocent man and after the attempted cover-up, Blackwaterpaid $5,000 to the family.

Is that not correct?Mr. PRINCE. I believe that was paid through the State Depart-

ment. That is similar to what DOD does, what the Army does ifthere is an accidental death from whether it is an aerial bomb, atank backs over somebody’s car or injures someone. There is com-pensation paid to try to make amends, but that was done throughthe State Department.

That was not paid to try to hush it up or cover it up. That ispart of the regular course of action. There was no cover-up becauseour guys reported the incident, and the company fired him for notreporting the incident.

Mr. DAVIS OF ILLINOIS. Can you tell me how it was determinedthat this man’s life was worth $5,000?

Mr. PRINCE. We don’t determine that value, sir. That is kind ofan Iraqi-wide policy. We don’t make that one.

Mr. DAVIS OF ILLINOIS. Do you know how many paymentsBlackwater has made to compensate innocent Iraqis or their fami-lies for deaths or injuries caused by Blackwater personnel?

Mr. PRINCE. I do not know that, sir.Mr. DAVIS OF ILLINOIS. Do you know what the total value of

those payments might be?Mr. PRINCE. No, sir.Mr. DAVIS OF ILLINOIS. Could you supply the committee with

that information?Mr. PRINCE. Yes, sir. I will make sure we get it back to you.Mr. DAVIS OF ILLINOIS. Thank you very much.Mr. Chairman, what I am concerned about is the lack of account-

ability. If one of our soldiers shoots an innocent Iraqi, he or she canface a military court martial. But when a Blackwater guard doesthis, the State Department helps arrange a payout to make theproblem go away. This seems to be a double standard, and it iscausing all kinds of problems in Iraq.

Chairman WAXMAN. The gentleman’s time has expired.Mr. Platts.Mr. PLATTS. Thank you, Mr. Chairman. I appreciate your holding

this hearing.Mr. Prince, I appreciate your testimony and want to thank you

personally for your 5 years of service to our Nation as a NavySEAL and also, having been to Iraq five times, for the dedicationof your colleagues for delegations I have been part of and certainlymany others as well. We are grateful for their courageous service.

Your contract, and it has been discussed already, is under theWorldwide Personal Protective Services Contract. My understand-


73

ing is under that contract, there are specific terms of conduct in-cluding rules of engagement with the use of force. Is that correct?

Mr. PRINCE. Yes, sir, that is correct.Mr. PLATTS. You testified about, as an example of the seriousness

with which your company takes the conduct of your employees, of122 individuals that have been fired for misconduct. Are you ableto give us what number of those were related to violations regard-ing use of force rules of engagement, specifically?

Mr. PRINCE. I believe the committee report listed it. Don’t quoteme on it. I think it says in the committee report around 10 or 15.I am not sure. It is in the committee report.

Mr. PLATTS. You accept that information as accurate?Mr. PRINCE. That is a weapons violation. That could mean a

dirty gun or possession of some unauthorized firearm. We havevery clear rules. We are only issued. The Government issues us ourweapons, even down to scopes. We are specified as to which opticaldevice we can put on the weapon. Some guys get fired because theyput, they like an aimpoint instead of an ACOG.

Mr. PLATTS. Of those 10 to 15, they may not all be related to useof force, misuse of force.

Mr. PRINCE. Yes, sir, correct.Mr. PLATTS. A number of times you were asked about in addition

to firing and fining and removing the person from your employ-ment and from Iraq, about what criminal actions you took, and youappropriately stated you are not a law enforcement entity. You area private company.

That being said, though, is it accurate to say that where thereis a criminal investigation by the Department of Justice of Depart-ment of State pursuing, that you provide any information that yourcompany has about misconduct?

Mr. PRINCE. Yes, we fully cooperate in the Christmas Eve inci-dent and any other ones that State Department or Justice Depart-ment wants to look at.

Mr. PLATTS. Thank you, Mr. Chairman. That is all of my ques-tions.

Again, my thanks to Mr. Prince and his colleagues for their serv-ice.

Chairman WAXMAN. Would the gentleman yield some of his timeto me?

Mr. PLATTS. Yes, Mr. Chairman.Chairman WAXMAN. Thank you.The point I want to ask you, Mr. Prince, is we appreciate what

you have done, but it looks like a lot of people in the U.S. militarydon’t appreciate it. One man, an Army colonel, Teddy Spain, said,‘‘I personally was concerned about any of the civilians runningaround on the battlefield during my time there. My main concernis with their lack of accountability when things went wrong.’’

Another senior U.S. military official said, ‘‘We had guys who sawthe aftermath,’’ meaning the aftermath of your activities there. ‘‘Itwas very bad. This is going to hurt us badly.’’

Then we had Secretary of Defense Robert Gates: ‘‘These incidentsmay be uncommon. We don’t know how common they are, but let’sassume that they are uncommon. I believe that they still have dis-proportionate impact on the Iraqi people. We have people who are


74

conducting themselves in a way that makes them an asset in thiswar, not a liability.’’

You are not answerable to the U.S. military, are you?You report to the State Department? You are under contract

with State, isn’t that right?Mr. PRINCE. In Iraq, we report to the State Department, but if

I could just add.Chairman WAXMAN. So your people are under the same rules as

the U.S. military.Mr. PRINCE. We operate under defensive rules of engagement.Mr. DAVIS OF VIRGINIA. Will the gentleman yield?Mr. PLATTS. Actually, Mr. Chairman, if I could reclaim my time

in responding.Mr. Prince, you provided the committee a detailed list of the reg-

ulations, treaties, laws that you operate under, is that correct?Mr. PRINCE. Yes, sir.Mr. PLATTS. That includes items that relate to both Department

of State and Department of Defense?Mr. PRINCE. It includes laws like MEJA, the UCMJ, all of which

we can be held accountable. Our people can be held accountable forwhile operating overseas.

Let me just ask, answer, Mr. Chairman, about whether we areadding value to the military or not.

I have to say my proudest professional moment was about a yearand a half ago. I spoke at the National War College. After myspeech, a colonel, a full bird colonel, came up to me afterwards. Hesaid, I just came back from brigade command in Baghdad, and hehad 4,000 or 5,000 guys working for him.

He said, as his guys were driving around the city, on the top oftheir dashboards of their humvees were the Blackwater call signsand the frequencies because his soldiers knew that if they got introuble, the Blackwater guys would come for them. They wouldcome to their aid and assist them, med evac them and help themout of a tough spot.

So if that is the reputation we have, I——Chairman WAXMAN. The Brigadier General Karl Horst said,

‘‘These guys run loose in this country and do stupid stuff.’’Mr. PLATTS. Mr. Chairman.Chairman WAXMAN. ‘‘There is no authority over them, so you

can’t come down on them when they escalate force.’’Mr. PLATTS. Mr. Chairman.Chairman WAXMAN. ‘‘They shoot people, and someone else has to

deal with the aftermath. It happens all over the place.’’Security contractors in Iraq are under scrutiny after shootings.What do you say?Mr. PRINCE. Sir, I can also tell you there is 170-some security

companies operating through Iraq. We get painted with a verybroad brush of a lot of the stuff they do.

On almost weekly basis, we get a contact from someone in DOD,some talk somewhere that says, oh, three Blackwater guys werejust taken hostage here. Four guys were killed there. Oh, you wereinvolved in a shooting over here.


75

When we fully investigate, we didn’t have any teams of guyswithin 100 miles of that location, but if a private security contrac-tor did it, it often gets attributed to us.

Chairman WAXMAN. Regardless of what private security contrac-tor does it, it is a problem for the United States.

Mr. Platts, you were kind enough to yield me time. Without ob-jection, I would like to give to you another 30 seconds.

Mr. PLATTS. If you could, I was going to yield to the rankingmember. Thank you, Mr. Chairman.

Mr. DAVIS OF VIRGINIA. I appreciate your questions, but let mejust say, Mr. Chairman, for the sake of argument, you are right.If we are paying too much and getting too little, what is the an-swer? More troops in Iraq? Less safe troops? Less safe diplomatsor less safe Members?

I mean this is the tradeoff. This is what we are trying to explorehere. They are contractors.

At the end of the day, we have to look to the Government whois contracting this out, putting down the rules of engagement, andthey will be on our next panel. He is just performing his contractat this point, and I think we have questions that we can ask theState Department.

But the alternatives, none of them are attractive when you arein a war zone.

Chairman WAXMAN. The gentleman’s time has expired.Mr. Tierney.Mr. TIERNEY. Thank you, Mr. Chairman.Mr. RYAN. Mr. Chairman, may I have 1 minute, please? We do

not need to leave. One minute, please.Chairman WAXMAN. Yes, go ahead.Mr. RYAN. Thank you.Chairman WAXMAN. Without objection, I would like to ask that

Mr. Davis and I, during this moment, have a minute each becauseI would like to say something that doesn’t involve a question andyou might want to respond to it.

The point I want to make, you raise that very essential question,what do we do if we don’t have enough troops there?

Well, I think we have to look at the fact that this isn’t a shortterm war. We have been there 5 years. It looks like we may bethere another 10 years. Even General Shinseki said we need moretroops.

At some point, you have to make a decision in this battlefield,in this war. If we don’t have enough troops to do the job, then weshould get more troops. But if we are going to go on the cheap toget private contractors, we are not on the cheap at all. It is costingus more money, and I believe it is costing us problems, causing usproblems with the Iraqi people.

Let’s let the military replan this. It seems to me we have hadbad decisions from this administration too much of the time in han-dling this whole war, planning for it adequately and staffing it ade-quately with the U.S. military. They are the ones that ought to bedoing this job.

Mr. Davis.


76

Mr. DAVIS OF VIRGINIA. Mr. Chairman, I understand, but let mejust say troops that are there are not paid to protect civilians. Thatis not what military troops are trained for.

I went through officer basic course in Georgia at Fort Benning.I went through basic training at Fort Ord. That is not what troopsare trained for when they go out into the battle zone.

This is a unique responsibility. It is through the State Depart-ment, not the Department of Defense. As we will hear from thenext panel, our troops are not, at this point, being trained to dothis kind of work. This is a different kind of process.

Now if we want to train them to do that, we can do that, but thathasn’t been the history throughout the last 50 years of the militarythat I am aware of. So we then have to decide from a cost-benefitperspective.

I think this is an important conversation to have, but to datethat is not the contractors’ fault. I think our argument would bewith the State Department.

Chairman WAXMAN. I want to yield to Mr. Tierney, butBlackwater and the private military recruit from our military. Sothese people are trained to the job that Blackwater and other pri-vate military people are asking them to do. So why can’t the mili-tary do it?

I think they could do it if we had enough military personnel.Mr. DAVIS OF VIRGINIA. Sir, I would like Mr. Prince to respond,

but I am sure they retrain them. They don’t just take raw recruitsout. Could I just ask him to respond?

Mr. PRINCE. Yes, sir. There was an earlier allegation about com-panies like us raiding the ranks of the Special Operations commu-nity for this kind of work, and the GAO report found that, yes, theyare getting out and working for companies like us, but they are notgetting out at any higher rate than they ever did before.

So, they are, instead of becoming a financial analyst or an ac-countant or some other kind of businessmen, they come to work forcompanies like Blackwater, but they are not getting out at any ratehigher than they ever did before.

If I could just correct two slight errors I made. We did not haveany fatalities of Blackwater personnel in 2006.

One of the contracts I testified to as being under the GSA sched-ule was, in fact, sole source. We will get you the very detailed infor-mation as to which contracts were GSA and which were solesource. I am not qualified to answer that right now.

Chairman WAXMAN. Thank you. We will receive any documentsyou have.

Mr. DAVIS OF VIRGINIA. Mr. Chairman, if I could just have aminute. I think that one of the things we want to get to in this andlater hearings is if the mission is going to be 4 or 5 or 6 years, doyou want to change the mission of the military, but that is not thecontractors’ fault. Our argument there is with the Defense Depart-ment and the State Department.

Mr. PRINCE. I strongly encourage the Congress to sponsor trueactivity-based cost studies. What does it cost the Air Force to movea pound of cargo in a war zone? What does it cost to put a brigadein the field or train it and to equip it? All these basic functions,even what is the hourly cost of aircraft doing refueling?


77

Chairman WAXMAN. We are going to have you answer some morequestions, I am sure, along those lines.

Mr. Tierney, it is your turn.Mr. TIERNEY. Are you certain, Mr. Chairman?Thank you.Mr. Prince, thank you for being here today. We have been dis-

cussing a little bit here about the goal of this particular venturehere. I think that General Petraeus has been pretty clear that hewould like to change it from the type of war it has been to onewhere he wants to defeat insurgents, and that entails, in signifi-cant part, winning the hearts and minds.

So I want to read to you this quote: ‘‘Counterinsurgents that useexcessive force to limit short term risk alienate the local populace.They deprive themselves of support or tolerance of the people. Thissituation is what insurgents want. It increases the threat theypose.’’

Do you know who made that statement?Mr. PRINCE. Do I know who made that statement?Mr. TIERNEY. Yes.Mr. PRINCE. No, sir.Mr. TIERNEY. That was General Petraeus. You know he was the

one who wrote the official counterinsurgency manual.It does appear from some of the evidence here, though, that

Blackwater and other companies, sometimes at least, conduct theirmissions in ways that lead exactly in the opposite direction thatGeneral Petraeus wants to go, but that doesn’t mean you are notfulfilling your contractual obligations.

In a recent report, there was a quote from Ann Exline Starr whois a former Coalition Provisional Authority Advisor. She talksabout the fact that the private mission is different from the overallpublic operation. ‘‘Those, for example, doing escort duty are goingto be judged by their bosses solely on whether they get their clientfrom point A to point B, not whether they win Iraqi hearts andminds along the way.’’

She goes on to talk about the fact that soldiers, when they es-corted her because they are able to escort people in training forthat, often times also interacted with the Iraqi community and didthings to ingratiate themselves to the Iraqis.

The contractors, by contrast, focused only on the contract. Shesaid what they told her was our mission is to protect the principalat all cost. If that means pissing off the Iraqis, too bad, her lan-guage, not mine.

Another counterinsurgency expert is Army Colonel PeterMansoor. Earlier this year, he made a statement about privatemilitary contractors, and he said, ‘‘If they push traffic off the roadsor if they shoot up a car that looks suspicious, they may be operat-ing within their contract, but it is to the detriment of the missionwhich is to bring people over to our side.’’

So when we look at Blackwater’s own records that show that youregularly move traffic off the roads and you shoot up cars in over160 incidents of firing on suspicious cars, we can see, I think, whythe tactics you use in carrying out your contract might mitigateagainst what we are trying to do in the insurgency.


78

Retired Army officer, actually, he is a conservative analyst now,Ralph Peters. He was more blunt about it. He said, ‘‘Armed con-tractors do harm COIN, counterinsurgency efforts. Just ask thetroops in Iraq.’’

We have had complaints from military leaders over and overagain that the ways that some contractors operate in Iraq are caus-ing danger and anger against the U.S. forces. Let me give you oneexample. For most of 2005, the Army’s Third Infantry Division wasin charge of security in Baghdad.

Here is what the deputy commander of this division, BrigadierGeneral Karl Horst, said about Blackwater and other private mili-tary contractors: ‘‘These guys run loose in this country and do stu-pid stuff. There is no authority over them, so you can’t come downon them when they escalate force. They shoot people, and someoneelse has to deal with the aftermath. It happens all over the place.’’

Are you familiar with General Horst, sir?Mr. PRINCE. No, sir. I have never met him.Mr. TIERNEY. Well, here is what Colonel Hammes said when he

was an officer in Iraq. He said, ‘‘The problem is in protecting theprincipal, they had to be very aggressive and each time they wentout, they had to offend locals, forcing them to the side of the road,being overpowering and intimidating, at times running vehicles offthe road, making enemies each time they went out.’’

So they were actually getting our contract exactly as we askedthem to, at the same time hurting our counterinsurgency effort.

This goes on again back to Colonel Peter Mansoor who said, ‘‘Iwould much rather see basically all armed entities in acounterinsurgency operation fall under the military chain of com-mand.’’

The CENTCOM Commander, Admiral James Fallon, who we allknow now for his current work, his quote is: ‘‘My instinct is thatit is easier and better if they were in uniform and working for me.’’

Can you see and appreciate, Mr. Prince, why there might besome contradiction between what we are asking your organizationand others like it to do under the contract as opposed to what weare trying to do as a military force in counterinsurgency?

Mr. PRINCE. Sir, I understand the challenges that the militaryfaces there.

Like I said before, there is 170 some companies doing businessin Iraq. Most of those security contractors are DOD. I think theDOD officers would even complain about their lack of reach overtheir own DOD Corps of Engineers, MNSTC-I type contractors.

Second, we know we are part of the total force in trying to getthe mission accomplished. Of the 16,000 missions our guys havedone, only 195 resulted in any kind of discharge of a weapon. Thatis less than 1 percent. So we strive for perfection, but we don’t getto choose when the bad guys attack us.

You know the bad guys have figured out. The terrorists have fig-ured out how to make a precision weapon with a car loaded withexplosives with a suicidal driver.

Mr. TIERNEY. Just to interrupt you for a second, you are not as-serting that every time that you take affirmative action it wassomebody firing at you first. You do acknowledge that, on some oc-casions at least, it was a preventive act on your part of your people.


79

Mr. PRINCE. Yes, sir, but this is what happens when our guys arenot able to prevent a suicide car bomb. This happened. This blewup three Blackwater personnel and one State Department securityofficer up in Mosul.

It tossed a 9,000 pound armored Suburban 50 feet into the sideof a building, followed by a whole bunch of small arms fire fromthe rooftops, a very serious ambush, killed four Americans thatfast.

Mr. TIERNEY. My question was that you are not disputing thefact that on some occasions when your people might be afraid thatsomething like that is going to happen, that they may fire first, askquestions later.

Mr. PRINCE. Sir, like I said the bad guys have made a precisionweapon. The Air Force has a system called a DIRCM, DirectionalInfrared Countermeasures. It is used to break the lock of an incom-ing surface to air missile. It shines a laser in the seeker head. Themissile breaks lock, and it veers away.

We have to go through a use of force continuum to try to breakthe lock of this potential deadly suicide weapon: hand and arm sig-nals, sirens, signs at the back of the vehicles, water bottles, penflares, shots to the radiator, shots to the windshield before we evengo to a lethal force option.

So our guys do go through it, but they——Mr. TIERNEY. Well, some of the evidence indicates that——Chairman WAXMAN. The gentleman’s time has expired.Mr. TIERNEY. Mr. Waxman, I would like to just finish up my

thought if I might. I think there has been fairly good estimationon the part of the committee here.

Chairman WAXMAN. If you can do it in seconds rather than min-utes.

Mr. TIERNEY. Thank you.The point being made is that there are instances—you are not

denying—when people shoot first on that.When you multiply that by the number of times it happens and

the number of people and Iraqis, that are implicated in those situa-tions, the number of people that they tell, it goes against ourcounterinsurgency effort and it goes to the issue of whether or notwe ought to have military personnel doing the job, whether this isan inherently Government function that we ought to have done onthe public side of it as opposed to having contractors who, by whatwe are seeing here today, really don’t have much accountabilitybeing exercised over them by either the State Department or theDepartment of Defense.

I yield back, Mr. Chairman.Chairman WAXMAN. The gentleman yields back the rest of his

time.The Chair now recognizes Mr. Duncan.Mr. DUNCAN. Thank you, Mr. Chairman.Mr. BURTON. Excuse me, Mr. Chairman.Mr. Prince, did you want to respond to what was said?Chairman WAXMAN. That wasn’t a question. That was a state-

ment by the Member.Mr. BURTON. Well, I know, but when an allegation.Chairman WAXMAN. Mr. Duncan is recognized.


80

Mr. BURTON. Mr. Chairman, when an allegation is made.Chairman WAXMAN. Mr. Duncan is recognized. You are using his

time.Mr. PRINCE. I will get it, Mr. Burton. It is all right.Mr. DUNCAN. Thank you, Mr. Chairman.The Washington Post reported yesterday. It said Army General

David H. Petraeus, the top U.S. Commander in Baghdad, over-seeing more than 160,000 troops, makes roughly $180,000 a yearor some $493 a day. That comes out to less than half the feecharged by Blackwater for its senior manager of a 34-man securityteam.

Our committee memorandum says using Blackwater instead ofU.S. troops to protect embassy officials is expensive. That is put-ting it lightly. Blackwater charges the Government $1,222 per dayfor the services of a private military contractor. This is equivalentto $445,000 per year, over six times more than the cost of an equiv-alent U.S. soldier.

This war has produced some of the most lavish, most fiscally ex-cessive and most exorbitantly profitable contracts in the history ofthe world. It seems to me that fiscal conservatives should feel noobligation to defend this type of contracting. In fact, it seems to methat fiscal conservatives should be the ones most horrified by this.

I notice in the table that Blackwater’s contracting has gone from$25 million in 2003, $48 million in 2004, to $593 million in 2006.If we are going to be there another 10 years, as some have said,I surely hope that we are not going to continue to see these typesof ridiculously excessive increases in the contracts that are beinghanded out.

I also notice that Blackwater is a subsidiary of the Prince Group,of Prince Group Holdings and that another one of the holdings ofthat firm is Presidential Airways, an aviation company that hasheld a contract with the U.S. Air Force Air Mobility Command.

Mr. Prince, can you tell me what percentage of Prince GroupHoldings comes from Federal contracts of all or any types?

Mr. PRINCE. Could you say the question again, sir? I didn’t quitehear you.

Mr. DUNCAN. Can you tell me? I don’t know all the companiesthat are in your Prince Group Holdings. Apparently, there is aPresidential Airways. I don’t know how many other companiesthere are.

What I am wondering about is how much of Prince Group Hold-ings comes from Federal contracts of any and all types?

Mr. PRINCE. Most of Prince Group Holdings comes from Federalcontracts, but if I could just come back and answer your statementabout prices that we charge, that $1,222.

Mr. DUNCAN. When you say most, does that mean 100 percent?Mr. PRINCE. No.Mr. DUNCAN. Rough guess, what percentage?Mr. PRINCE. Rough guess, 90 percent.Mr. DUNCAN. Do you still have a contract with Presidential Air-

ways with Air Force Mobility Command?Mr. PRINCE. Yes, sir.Mr. DUNCAN. Rough guess, how much is that contract each year?


81

Mr. PRINCE. I don’t know what the exact number is, sir. It is foreight aircraft right now. I don’t know what they price out at.

Mr. DUNCAN. What other companies are in Prince Group Hold-ings?

Mr. PRINCE. There is a long list. I have a manufacturing businessthat has nothing to do with Federal stuff, and we make pieces andparts for automotive, appliance, industrial, power. We competewith the likes of the Japanese and Koreans and European compa-nies every day.

Mr. DUNCAN. All right.Mr. PRINCE. But if I could just answer the question about how

much we charge, those are competitively bid prices. The $1,222cited in the report is not accurate.

You also, the committee should have received this. I don’t knowif you have seen that. It lays out base year bill rates for an averagesecurity guy. Base year is $981, not $1,222, and our profit on that,projected to be 10.4 percent, nothing higher.

And on top of that, I can tell you we have three helicopters thathave been shot down this year, a Little Bird and two Bell 412s.Those are company helicopters, and when they go down that comesout of our hide. We have to self-insure on those.

So the risks we take, the financial risks, whenever an aircraft isdoing a mission for the State Department or responding to somemed evac need, above and beyond the statement of our contract,trying to pull a U.S. soldier out of bad, wounded situation, we takethat risk as a company, and our guys do themselves at great per-sonal peril.

So it is not just about the money. We are a business. We try tobe efficient and excellent and deliver a good service.

We are happy to have that argument, sir, not the argument, thediscussion. Sponsor an activity-based cost study. What would itcost the Diplomatic Security Service to bring all those folks inhouse as staff?

Look at it. We are happy to have that argument. If the Govern-ment doesn’t want us to do this, we will go do something else, butthere is plenty of case to be made and plenty of spreadsheets to beanalyzed.

Chairman WAXMAN. The gentleman’s time has expired.The Chair now recognizes Mr. Clay.Mr. CLAY. Thank you, Mr. Chairman.Mr. Prince, I am truly disturbed by reports of Blackwater con-

tractors wreaking havoc on innocent Iraqi citizens. I am equallytroubled that taxpayers have been taken for a ride by paying sixtimes the cost of a U.S. soldier for Blackwater contractors.

Now, Mr. Prince, you have argued that Blackwater provides acost-effective service to the U.S. Government in part because byhiring private contractors the Government can avoid paying carry-ing costs such as training, salaries and benefits.

Yet, in your written testimony, you state that Blackwater person-nel are all military veterans and law enforcement veterans, manyof whom had recent military deployments. Since so many of youremployees have recently left Government service, doesn’t thatmean they have received years of specialized training at the ex-pense of the Federal Government?


82

Mr. PRINCE. People serve the U.S. Government for different peri-ods of time, and that is a choice they make and have been makingsince the United States has had a standing military. They serve for4 years. They serve for six. They serve for 20 or 30.

Mr. CLAY. So the U.S. taxpayers are paying for that training.Mr. PRINCE. They are paying for that anyway. We provide a vehi-

cle, a mechanism for the U.S. Government to utilize that sunk costthat they have put into the training for these people. We reorga-nize it and package in a way to fill these gaps that the U.S. Gov-ernment has in these kinds of contingency operations.

To stand up a 1,000-man or actually you need a 3,000-man, atleast, military police brigade to do this kind of work because forevery person that is deployed, they are going to have two moreback stateside, one in training and one in standdown.

So you spin that meter, and the costs get big very quickly. So weare just reorganizing those skills that the Government has alreadypaid for and putting them back to work.

Mr. CLAY. Last week, Defense Secretary Robert Gates expressedconcern that Blackwater and other private military contractors areactually poaching the military’s ranks, luring service membersaway with much higher salaries.

When Secretary Gates testified before the Senate AppropriationsCommittee, he said he asked Pentagon officials to work on draftingnon-compete clauses in order to put some limits on the ability ofthese contractors to lure highly trained soldiers out of our forcesto go and work for them.

How do you feel about non-compete clauses, Mr. Prince?Mr. PRINCE. I think that would be fine, but the fact is everyone

that joins the military doesn’t necessarily serve 20 years. So, atsome point, they are going to get out after four, six, eight, whateverthat period of time is, whatever they decide because we don’t havea draft. We have a voluntary service.

I think it would be upsetting to a lot of soldiers if they didn’thave the ability to go use the skills that they have accumulated inthe military to go work in the private sector because you couldmake the same case about aviation mechanics, jet engine mechan-ics, guys that work on a reactor on a submarine. All those skillshave direct correlation to the private sector. I don’t think puttingin non-competes for them would do well to draw guys into the mili-tary in the front side either.

Again, the GAO study found that the Special Operations commu-nity, yes, folks are getting out and they go to MBA school. Theybecome some other private sector job. Yes, a lot of them come towork for companies like us but not at any higher rate than theyever did before.

Mr. CLAY. Well, I mean if the Pentagon adopts the non-competeclause, it certainly indicates to me that the Secretary is really con-cerned about you all poaching on our service personnel, and thatis what it indicates to me.

Let me also say to the viewers of C–SPAN today. This Congress,some in this Congress and the administration seem to be steepedin hypocrisy as far as taking these frequent flies to the Green Zonein Baghdad. When you look, they are some of the same ones who


83

would never lift a rifle to defend this country in Vietnam but yetridicule and criticize those who have not traveled to Baghdad.

I just want the American public to be aware that some in hereare steeped in hypocrisy.

I yield back my time, Mr. Chairman.Chairman WAXMAN. The gentleman’s time has concluded.The gentleman from Idaho, Mr. Simpson.Mr. TURNER. Thank you, Mr. Chairman.I come from Ohio, and Ohio is known frequently as the Heart-

land, and in the Heartland there are a few things that are easythat are not so easy in Washington, DC. Even in Hollywood, someof these things are easy, and those are the issues of who is on ourteam and who is on their team.

Today, I am a little saddened by this hearing because I am abso-lutely a supporter of congressional oversight and believe this com-mittee has incredible functions that we have to do. Our witnesstoday even talked about being a contractor, the questions that weshould be asking of reliability, accountability, cost. A lot of the in-formation we have before us is about dollars, rules of engagementand the like.

But what unfortunately dissolves into our team versus theirteam, by any account, by Hollywood’s account, by the performanceaccount, Blackwater is our team. They are our team working in thetrenches and in a war zone.

I haven’t heard many questions on this committee about therules of engagement or the limits on the work of Al-Qaeda or theinsurgents. In fact, I don’t recall one hearing in this committeewhere there has been indignation or troubling responses as a resultof the senseless and heartless killings of Al-Qaeda and the insur-gents, but I hear today huge concerns over what we must exert asoversight on Blackwater. I think it crosses the line between ourteam and their team.

Blackwater has questions to answer, and I believe that they areprepared to do that and today have come forward to do thosethings, but we should not go to the extent of underminingBlackwater’s ability to perform as our team.

The Washington Post today, in its editorial in reviewing how thisissue has come to light, stated, ‘‘Congressional Democrats despisethe firm because it symbolizes the private contracting of militarymissions that many oppose in principle.’’

This is the Washington Post saying that the congressional Demo-crats are despising this firm because of its engagement in militarymissions that they oppose.

The Washington Post goes on to say, ‘‘At the same time, it is fool-ish’’—that is a pretty strong word for the Washington Post.

‘‘At the same time, it is foolish to propose the elimination of pri-vate security firms in Iraq and Afghanistan, at least in the shortterm.’’

I would hope as we continue our important functions of oversightthat we don’t undermine our team.

Now, Mr. Chairman, you made a comment that I have to respondto in your opening statement. It is written in your opening state-ment, and it says, ‘‘As a general rule, children from wealthy andpolitically connected families no longer serve in the military.’’


84

Mr. Chairman, that is an attack on our team. I can tell you thatDuncan Hunter, former chairman of the Armed Services Commit-tee, currently ranking member, whose son served in Iraq, woulddisagree with you. Joe Wilson with the Armed Services Committee,whose son served, would disagree with you.

I can tell you that the DOD in its report on social representationin the U.S. military services and the GAO in their September 22,2005 report would disagree with you.

Quoting from the DOD report, it says, ‘‘Our Population Represen-tation Report shows both a diversity and quality of the total force.Men and women of various racial and ethnic groups, of divergentbackgrounds, from every State in our country serve as active andselective reserve, enlisted members and officers of the Army, Navyand Marine Corps and Air Force and Coast Guard.

‘‘One particular note, the mean cognitive ability and educationallevels of these Soldiers, Sailors, Marines, Airmen and CoastGuardsmen are above the average of comparatively aged U.S. citi-zens.’’

The GAO, in their report, similarly confirms that between 1974and 2000, the force became older and better educated.

So I would hope that the comments by the chairman are not in-terpreted as what I heard them as, as diminishing the abilities andthe backgrounds of those who serve in our military.

Mr. Prince, my question for you, you are free of some of the limit-ing acquisition rules that our military is subject to. A general hasa different ability to be able to acquire something as you do cor-porately.

Could you give us some insight as to how our acquisition rulesinhibit our military in performing some of the things that you doand ways in which we can change those acquisition rules to deliverto them the things that they need?

Mr. PRINCE. Thanks for that question.I would say we find that the requirements process for the mili-

tary constantly looks for the 120 percent solution, and it overspecsthe electronic capability. I mean there is an enormous amount ofextra stuff and capability put on a vehicle that might not be nec-essary to just fulfill that job.

I mean if you are going to, you could almost buy vehicles justplanned on for Iraq right now, almost off the shelf, without havingto plan about net-centric warfare and all the other bells and whis-tles that sometimes the DOD wants to put on things. So we buyto solve the situation at hand.

Chairman WAXMAN. The gentleman’s time has expired.I want to apologize to the gentleman for indicating that he is

from a different State than Ohio. He is a proud Ohioan, and I cer-tainly want to agree with him. I hope nobody misinterprets mycomments.

I would like to now call on Ms. Watson.Ms. WATSON. Then I want an apology for the reference to Holly-

wood. That is the area that I represent here.I heard the Chair apologize. I just had to tail-in on that one.I want to commend Mr. Prince for his duties, for his skill and

for his heading up Blackwater.


85

However, when I hear that one of the patron saints of some peo-ple, Rush Limbaugh, called our soldiers, who have been critical ofthe experience in Iraq, phony soldiers, I am offended and youshould be offended too.

There was a sign over there earlier, Mr. Chair, the GeneralPetraeus satire, and I had sent a message that it should be takendown because it was insulting to people.

I think that people that call our soldiers, who speak from experi-ence, phony, ought to be made to apologize.

Mr. ISSA. Would the gentlelady from Hollywood yield for a ques-tion?

Ms. WATSON. No, I will not yield because I have just a little time.Let me say this. I am really concerned when it comes to

privatizing the various struggles that we are having in a war zone.I am looking at a book here that says Blackwater: The Rise of

the World’s Most Powerful Mercenary Army. That is really disturb-ing to me because I feel that every young man and woman or everyman and woman in the military ought to be paid for their service,and I think you are making a good argument for the amount ofmoney that you have been paid, your organization.

I think my question is do you feel that we ought to continue onwith privatizing the kinds of duties that our military should betrained to execute?

Mr. PRINCE. Ma’am, the U.S. military is the finest, most powerfulmilitary in the world, bar none.

Ms. WATSON. Absolutely, and they should be paid accordingly.Mr. PRINCE. It is designed for large-scale conventional oper-

ations, what they did to Saddam in 1991 and then again in 2003.Ms. WATSON. Well, then there is something wrong with the de-

sign, and that is my point. I think you responded, and I hear youclearly. You are providing a service, and I commend you.

Let me just continue on.You are providing a service, and those little voids, Mr. Chairman

and committee members, ought to be filled by the young, the peoplewho volunteer. We have no draft. These are volunteers.

Why should they put their lives on the line for this country andnot be compensated, so their families back at home don’t have togo on welfare and are living in housing that is substandard?

I am just infuriated, not with you, but with the fact that ourState Department and our Department of Defense cannot see theirway. They talk about we don’t have the money, saving money. Thiswar is costing $1 trillion.

You have been paid over $1 billion and will continue to be paidso that you can buy the helicopters that are shot down.

And so, my question to you, are we going to have to continue toprivatize because we are not training to do what you do and wouldit not be better to hire you to train our military to do the kind ofguarding of VIP personnel?

Whenever there is a CODEL, you have to guard them. When peo-ple from the State Department come, you have to guard them be-cause we say that our military is not prepared and not trained todo that.


86

Mr. PRINCE. Well, ma’am, I am happy to say that we do a signifi-cant amount of training for the U.S. military every day at our cou-ple of facilities we have around the country.

Ms. WATSON. But you are saying that you fill in a specialty area.Mr. PRINCE. It is a specialty gap, high-end personal security.Ms. WATSON. My question that I throw out to all of us is why

can’t we train these people who are willing, who have courage togo into the military, but then we have to bring on a private firmto do the job they should be trained to do and pay them three orfour times more than we pay those who choose to serve their coun-try by fighting in theater?

Mr. PRINCE. The military could do that, but the U.S. militarycan’t be all things to all people all the time.

Ms. WATSON. Why not?Chairman WAXMAN. The gentlelady’s time has expired.Mr. PRINCE. The tyranny of shortage of time and distance. I

mean you can’t have an anti-air missile guy also be doing PSD mis-sions and knowing how to be an aviation mechanic. It is too broadof a base of skill requirement.

Ms. WATSON. We need more people.Chairman WAXMAN. Mr. Issa.Mr. ISSA. Thank you, Mr. Chairman.Mr. RYAN. Mr. Chairman, may I have 1 minute?Chairman WAXMAN. Thank you.Mr. Issa.Mr. ISSA. Thank you, Mr. Chairman.Boy, there are so many inaccuracies, so little time. Perhaps let’s

start with something from the gentlelady from Hollywood. Isn’t ittrue that, in fact, the military’s mission has historically not beento guard either VIPs or the State Department as a whole?

Mr. PRINCE. Correct, yes, sir.Mr. ISSA. Isn’t it true that, in fact, your organization works

under the regional security officer for Baghdad?Mr. PRINCE. Yes, sir.Mr. ISSA. Isn’t it true that contractors have been used directly

and indirectly, in other words, non-Federal employees in placesBeirut, Afghanistan, Bosnia, under the Clinton administration, rou-tinely?

Isn’t there a historic time in which we used non-career RSOs orforeign service officers for these jobs?

Mr. PRINCE. Since the founding of the republic.Mr. ISSA. OK, so, we are not talking about the military here at

all including, with all due respect, to Secretary Gates. Somebody,if the State Department recruited for the positions you are pres-ently providing, they would be in all likelihood recruiting eithercurrent or prior military, wouldn’t they?

Mr. PRINCE. Yes, sir.Mr. ISSA. Is it reasonable for the State Department to own attack

helicopters or Bell helicopters that are weaponized?Mr. PRINCE. Well, that is up to them, and our helicopters aren’t

weaponized.Mr. ISSA. Let’s look at it another way. Outside of the two thea-

ters, Afghanistan and Iraq, do you know of any place in which the


87

State Department owns or directly controls weapons, gunships, ifyou will, to protect convoys?

Mr. PRINCE. They do some crop eradication, some cocaine eradi-cation work in Colombia. That is the only place I know.

Mr. ISSA. OK. So this is an unusual mission and one that begsfor not creating a career position for foreign service helicopter pilot.There would only be about two or three places they would ever be,isn’t that true?

Mr. PRINCE. Well, actually, those are all flown by contractors aswell, sir, down in Colombia.

Mr. ISSA. I am very well aware of that, and that is the point, Iguess. We are having a hearing that is supposed to not be aboutyour company and supposed to not be about one incident on Sep-tember 16th. It is supposed to be about cost effectiveness of con-tractors, isn’t it?

Mr. PRINCE. Yes, sir.Mr. ISSA. I wish we were bringing in facts and figures about let’s

say $600 billion of DOD contracts or DOD costs into one millionsoldiers so that we could go, well, isn’t that about $600,000 forevery soldier?

Isn’t, in fact, the cost of the Department of Defense, the militaryfar greater than what we pay our men and women in uniform atthe time that they are in combat?

Mr. PRINCE. I don’t know what those numbers are, sir, but thatwould be a great, fully burdened cost study that Congress couldsponsor. They don’t have to do the whole thing, just take some keynodes and really study it.

Mr. ISSA. Well, and hopefully, we will. Hopefully, we will get toserious discussion on these issues because I think looking at thecosts-benefits should always be done. For permanent requirements,I don’t want to use contractors if, in fact, Federal employees wouldbe more appropriate.

I will mention one thing. If you are feeling a little pressuretoday, if it is a little tough, just be glad you don’t make a diabetesdrug.

Mr. PRINCE. To where, sir?Mr. ISSA. Be glad you don’t make a diabetes drug. Compared to

what we did to the Avandia makers, GlaxoSmithKline, you are get-ting off easy. Trust me. They had their product destroyed by jury-rigged testimony and studies that were essentially co-opted in ad-vance.

But let’s just go to one area that I think hasn’t been discussedand others might not discuss it. Is your sister’s name, BetsyDeVos?

Mr. PRINCE. DeVos.Mr. ISSA. Yes. Is that your sister?Mr. PRINCE. It is.Mr. ISSA. Was she a former Michigan Republican Party Chair-

woman?Mr. PRINCE. Yes, she was.Mr. ISSA. Was she a pioneer for Bush?Mr. PRINCE. I don’t know. Could be.Mr. ISSA. Was she a large contributor to President Bush?Mr. PRINCE. They probably were.


88

Mr. ISSA. And raised a lot of money for President Bush?Mr. PRINCE. Could be.Mr. ISSA. Went to the Republican conventions in 2000 and 2004?Mr. PRINCE. I would imagine they did, yes.Mr. ISSA. Isn’t it true that your family, at least that part of the

family, are very well known Republicans?Mr. PRINCE. Yes.Mr. ISSA. Wouldn’t it be fair to say that your company is easily

identified as a Republican-leaning company and, in fact, theAmway Co. somewhat so because of family members there?

You don’t have to speculate overly, but isn’t that generally some-thing you understand?

Mr. PRINCE. Blackwater is not a partisan company. We haven’tdone any, you know. We execute the mission given us, whether itis training Navy Sailors or protecting State Department personnel.

Yes, I have given individual political contributions. I have donethat since college, and I did it when I was an active duty memberof the Armed Services, and I will probably continue doing that for-ward. I don’t give that. I didn’t give up that right when I becamea defense contractor.

Mr. ISSA. Right.Chairman WAXMAN. The gentleman’s time has expired.Mr. ISSA. Mr. Chairman, just to finish like we did on the other

side of the aisle, I think you are exactly right, that in fact beingidentified as partisan Republican, in fact your company appears tohave done what all companies do which is in fact to operate, to dothe job they are doing in a non-partisan way.

I would hope that this committee and the public take note thatlabeling some company as Republican-oriented because of familymembers is inappropriate, and I would hope that we not do itagain.

I yield back.Chairman WAXMAN. Well, the only one who has done it is you.

[Laughter.]Mr. ISSA. Mr. Chairman, I think it has been made. I think the

report made it very clear.Chairman WAXMAN. Maybe that is why all the Republicans are

defending the company.Well, Mr. Yarmuth, it is your time.Mr. YARMUTH. Thank you, Mr. Chairman.Mr. Prince, welcome. Thank you for your testimony.Mr. PRINCE. Thank you, sir.Mr. YARMUTH. I want to focus on the whole issue of cost and

profitability, and I want to clarify something. You talked at onepoint about the fact that what you are essentially doing is biddingfor people who would otherwise be able to make as much moneyas you would be paying them in the private sector.

First of all, some of that defies imagination because we are talk-ing about essentially $400,000 to $500,000 worth of cost per indi-vidual per year to the Government which would put that individualor that job category in the highest 1 percent of income earners inthe country.

So my question to you would be, and this is not in any way toimpugn or to minimize the value of Navy SEALs, but outside of a


89

military setting, where could a Navy SEAL, for those talents, make$400,000 to $500,000 if it weren’t for a Government contract?

Mr. PRINCE. I don’t know of any of our people that have made$400,000 to $500,000 working as a contractor. They are not gettingpaid that much.

They get paid for every day they are in the hot zone. So it is verymuch like a professional mariner’s existence. They go to sea. Theyget paid every day they are in the hot zone. They day they leave,their pay goes to zero.

Average pay, hypothetically, around $500 a day. We don’t paythe $1,000 a day. That is a huge misperception. It is a flat-outerror in the media.

So if you take $15,000 a month and they work for 6 months, itis $90,000.

Mr. YARMUTH. But that is not the cost of that job to the Amer-ican taxpayer.

Mr. PRINCE. Yes, sir, but they are not showing up at the jobnaked. They need uniforms, equipment, body armor, boots, every-thing you wear from head to toe, their training, their travel, theirinsurance, sometimes their food.

I mean there are very, very sophisticated price models that webid competitively for, hundreds and hundreds of line items. Believeme, our folks earn a lot of electrons putting those price models to-gether because you really got to know what you are doing on thefront end. But, again, it is a competitively bid product.

Mr. YARMUTH. Well, I appreciate that, and I want to pursue thata second, but I do have in front of me an invoice from Blackwaterto the Department of State in which one of the items is invoicequantity, 3,450 units each at a cost of $1,221.62. That is your in-voice.

Mr. PRINCE. I am not sure what that invoice is. Could I see that,sir?

Mr. YARMUTH. I would be happy to submit that for the record.We dealt several months ago with a situation in which I don’t be-

lieve your company was a subcontractor for the State Departmentor a contractor. You were a subcontractor. I am talking about theincident in Fallujah where four of your employees were ambushedand killed, and we had testimony from two of their wives and twoof their mothers several months ago.

In the course of that testimony, it was we were told that theyhad actually contracted, each of them, at a rate of $600 a day. Thatis what they were to be paid. By the time it got to the Americantaxpayer, it was around $1,100 a day. You were the third sub-contractor under a contract given to KBR, as I recall, Halliburton,then a Halliburton subsidiary. And we asked the question of all ofthose subcontractors, did anybody add value up the ladder for thatadditional $500 based on—and we asked, did they provide any spe-cial equipment, any special services, whatever. And the answer wasno.

So in that case, that is not your profit, but it appeared to us thatby and large that additional $500 that the American taxpayer paidfor that one person was largely profit to three different corpora-tions. Now, can you shed any light on that situation? And I don’tbelieve, that was, I think, a Defense Department contract and KBR


90

was just delivering supplies to troops and you were guarding theconvoys.

Mr. PRINCE. That could easily be. I am not completely familiarwith the contracting and subcontracting arrangement that you arespeaking of. But I can tell you, with our work with the State De-partment, we are direct to the State Department and there is noother intermediary adding cost or not adding value.

Mr. YARMUTH. One other question I want to ask. You made thecomparison, again, about that we have to bid for these people. Butisn’t there a significant distinction, I understand if we, the militarytrains a pilot and then the pilot goes out and is bid for by commer-cial aircraft and so forth, that is the private sector bidding. But inthis situation, the American taxpayers are bidding against them-selves. Because we trained Navy SEALs, Navy SEALs then go intoyour employ, then the Navy has to bid, as I understand, in one re-port, $100,000 to get them back.

But we are bidding against ourselves, aren’t we? We are not bid-ding against another external competitor.

Mr. PRINCE. The nature of the demand of this, especially a groupof Blackwater, even before 9/11, it grew after the Cole was blownup, that Navy ship. Now, in a post-9/11 world, you have a lot ofdifferent demands for those kinds of skill sets that are in muchhigher demand than they were in the late 1990’s. So that is thechanging nature of the market.

Chairman WAXMAN. The gentleman’s time has expired.Mr. McHenry. Oh, I am sorry. Mr. Westmoreland.Mr. WESTMORELAND. Thank you, Mr. Chairman.Just to clarify a little bit about who is calling who a Republican

company, I want to read from a December 13, 2006 letter from Cal-lahan and Blaine to Ms. Pelosi, Mr. Waxman, Senator Dorgan, Sen-ator Reid, Representative Chris Van Hollen: ‘‘Nonetheless, asAmerican citizens, we hereby petition to you to initiate support andcontinue the congressional investigations into war profiteering andspecifically Blackwater’s conduct. Now that there has been a shiftin power in Congress, we are hopeful that your investigation, aswell as the investigations by Senator Dorgan and Senator Wax-man, will be taken seriously by these extremely Republican compa-nies such as Blackwater, who have been uncooperative to date andthat these investigations will be fruitful and meaningful.’’

And Mr. Prince, you may recognize that name, because I believethey also are the attorneys for some people who are suing you.

Mr. Prince, first of all, let me give you a little background, prob-ably, as to why you are here. There is a party in Congress thatdoes not like companies who show a profit. If you are wealthy, theyfigure you should have paid more taxes or that you are a crookedbusinessman. They do not understand someone who is an entre-preneur and offers a valuable service that is above its competitorsand that is based at a competitive price.

They want to fight a war with no casualties. They exploit ourchildren, whether it is with a plan that will socialize medicine inthis country or the horrible situation when innocent children arevictims of an act of war. They often have hearings such as this tobias lawsuits that their crony lawyer friends may be handling.


91

There is no cost too high for them for citizens to pay, citizens ofthis country, whether it is the price of personal integrity or moreof their wealth, as long as it moves forward with the ultimate goalof distribution of wealth of the successful for the takers of thisworld.

They love to have their cake and eat it too, though. For instance,they think the Iraqi government is corrupt and inept, but yet theyquestion you about taking one of your former employees out of thecountry with the government’s permission. Another example, theysay the military should be doing your job, yet they don’t want addi-tional troops sent to the theater.

One more example, Mr. Prince, is they complain about what ourmilitary personnel make, and then they complain about what youpay the same people that they complained about making so little.So you can see that there is some confusion.

I also want to point out to you that 9 of the 22 Members on thispanel that voted voted that they agreed with MoveOn.org’s attackon General Petraeus.

Let me ask you, Mr. Prince, well, let me say, some ofBlackwater’s critics have stated that the firing of personnel hasbeen surprisingly frequent. Have you or your managers ever firedan employee for doing a good job?

Mr. PRINCE. Not that I know of.Mr. WESTMORELAND. I don’t think anybody does, do they? So if

one of your employees was doing a bad job or not meeting your cri-teria, then those were some of the people that you got rid of, right?

Mr. PRINCE. If they don’t hold to the standard, they have one de-cision to make: window or aisle.

Mr. WESTMORELAND. And Mr. Prince, what kinds of professionalbackgrounds do most of your security personnel have?

Mr. PRINCE. All of our personnel working on the WPPS-type con-tract come from the U.S. military or law enforcement community.They have a number of years of experience doing that kind of work,ranging from 5, 8 years up to 20 or 30 years of experience. Theyare discharged honorably, most of them are decorated. They havegotten out of the military to choose to take another career path. Sowe give them the ability to use those skills back again working forthe U.S. Government.

And let me just say, we are not a partisan organization. That isnot on the interview form when you come to work for Blackwater,what party you affiliate with at all. We affiliate with America. Andthe idea that people call us mercenaries, we have Americans work-ing for America, protecting Americans.

Mr. WESTMORELAND. And I think you do a very good job.Mr. PRINCE. And the Oxford Dictionary defines a mercenary as

a professional soldier working for a foreign government. And Amer-icans working for America is not it. Yet we have a handful of, wecall them third country national folks, folks from Latin America,they guard some gates and they guard some camps. They don’tleave that area, they are static guards. Our PSD guys are Ameri-cans working for America.

Chairman WAXMAN. The gentleman’s time has expired.Mr. Braley.


92

Mr. BRALEY. Thank you, Mr. Chairman. Mr. Prince, my bestfriend married Mary Lubbers, whose father and grandfather werethe presidents at Hope College.

Mr. PRINCE. Small world.Mr. BRALEY. So I want to start by asking you about a statement

you made on page 3 of your written statement that you sharedwith the committee, ‘‘The company and its personnel are alreadyaccountable under and subject to numerous statutes, treaties andregulations of the United States.’’ And then you went on and at-tached to your statement a list of existing laws, regulations andtreaties that apply to contractors and their personnel. Is that thedocument that I am holding up that you attached?

Mr. PRINCE. Yes, sir.Mr. BRALEY. Is it your testimony today, under oath, that all

Blackwater employees working in Iraq and Afghanistan are subjectto the Uniform Code of Military Justice, the Military Extra-Terri-torial Jurisdiction Act and the War Crimes Act?

Mr. PRINCE. It is my understanding that is the case, yes, sir.Mr. BRALEY. All right, well, let’s look at this document, I want

to ask you about it. This document, the Uniform Code of MilitaryJustice, applies in the time of declared war. You would agree thatthere has been no declared war in Iraq or Afghanistan?

Mr. PRINCE. No, but I believe it has been amended to includecontingency operations.

Mr. BRALEY. Is it your understanding that a contingency oper-ation would apply to what is going on in Iraq and Afghanistan?

Mr. PRINCE. I am not a lawyer, but my layman’s understandingis yes.

Mr. BRALEY. All right. And then it says to persons serving withor accompanying an armed force in the field. Do you see that?

Mr. PRINCE. I don’t have it in front of me, but you are readingfrom it.

Mr. BRALEY. Well, I am just reading from the document that youprovided to us.

Mr. PRINCE. Right.Mr. BRALEY. If that is what the Uniform Code of Military Justice

provides, you would agree that based upon your own description ofthe activities of your company, there are times when your employ-ees are not serving with or accompanying armed forces in the field.

Mr. PRINCE. There are times when U.S. military units are actu-ally embedded in our motorcades.

Mr. BRALEY. But to answer my question, there are times whenyour employees are not serving with or accompanying armed forcesin the field, isn’t that correct?

Mr. PRINCE. Sir, I am not a lawyer. So I am not going to giveyou that level of detail. If you want a clear written statement asto the accompanying opinion, I am sure the State Department cananswer what their opinion is on that. But we have looked at it andwe feel comfortable that our guys could be brought under investiga-tion with those ruling legal authorities over their heads.

Mr. BRALEY. Then let’s look at the Military Extra-Territorial Ju-risdiction Act, Section 3261, Criminal Offenses Committed by Cer-tain Members of the Armed Forces and by Persons Employed by orAccompanied by the Armed Forces Outside the United States. You


93

would agree that there are circumstances where your employeeswould not meet that definition based upon their service in Iraq andAfghanistan.

Mr. PRINCE. I believe that was changed yet again to include anyU.S.-funded contract.

Mr. BRALEY. Well, that is the definition that applies to U.S.-fund-ed contracts from the statute.

Mr. PRINCE. Again, I am not a lawyer, sir. I am sorry.Mr. BRALEY. Then let’s look at the War Crimes Act of 1996,

which applies if the perpetrator is a U.S. national or a member ofU.S. armed forces. You would agree based upon your testimonytoday that there would be circumstances when some of your em-ployees would not meet the definition of perpetrator to be coveredby the War Crimes Act.

Mr. PRINCE. Again, I am not sure, sir.Mr. BRALEY. Well, you testified that you hire some third country

nationals. They would not be U.S. nationals, would they?Mr. PRINCE. That is correct.Mr. BRALEY. And they would not be members of the U.S. armed

forces.Mr. PRINCE. But they are serving in a U.S. DOD contingency op-

eration.Mr. BRALEY. Then let’s talk about these payments that have

been made as a result of deaths that were related to the conductof Blackwater employees. One of the payments that we have beenprovided information about was this $15,000 payment to theguard’s family who was guarding Iraqi Vice President Mahdi. Areyou familiar with that payment?

Mr. PRINCE. Yes, sir.Mr. BRALEY. Did you have any input into the determination of

the amount of that payment?Mr. PRINCE. I discussed it with some State Department officials,

yes.Mr. BRALEY. Did you feel that it was a satisfactory level of com-

pensation for the loss of that individual?Mr. PRINCE. I believe the cash that was paid was actually

$20,000, not $15,000.Mr. BRALEY. All right, $15,000 or $20,000. Based on the informa-

tion that we have been provided, one of the things we know is thatBlackwater charges the Government $1,222 a day for the servicesof some of its employees, is that correct?

Mr. PRINCE. I believe that number is lower. The chart that weprovided the committee shows a blended average significantly lessthan that.

Mr. BRALEY. Assuming that figure is correct, if you take someoneyour age in the United States and look at the U.S. life table, youwill find that somebody your age in this country has a life expect-ancy of 40 years. So if you were to take that rate of $1,222 a day,multiply it times 365 days a year, multiply it by a 40 year life ex-pectancy, you would get a total lifetime earnings payout of$17,841,200. You would agree with me that pales in comparison toa payment of either $15,000 or $20,000.

Chairman WAXMAN. The gentleman’s time has expired. You cananswer the question.


94

Mr. PRINCE. Your calculations there don’t make any sense to me,because that charge, that $1,200 charge that you are talking about,claiming that we charge the Government, that includes aviationsupport. Some of those helicopters that got shot down, that comesout of our hide. Gear, training, travel, all the rest. So I am notquite sure how that math works out. But I would be happy to getback to you if you have any written questions.

Chairman WAXMAN. The gentleman’s time has expired.Mr. McHenry.Mr. MCHENRY. Thank you, Mr. Chairman.I want to go through a few facts and make sure we have this on

the record. The gentleman is discussing cost, and I want to sort ofunderstand all the facts before we get to a conclusion here. Youwere previously in the Navy SEALs. How long were you in themilitary, sir?

Mr. PRINCE. In 1992 through the end of 1996.Mr. MCHENRY. What is the average time, having been in the

SEALs, perhaps you would know this, what is the average time aspecial forces operator is in the service?

Mr. PRINCE. Five or 6 years, up to 20. It really varies.Mr. MCHENRY. But based on your experience?Mr. PRINCE. Guys really make a decision point at about 12 years

whether they are going to stay for a career or get out. So I wouldsay 10 to 12 years.

Mr. MCHENRY. All right. Let’s say an operator retires from themilitary, at which point a Navy SEAL, average Navy SEAL isdoing a much more, a much different operation, they are dealingwith explosives rather than defensive caravans and convoys. Whatdo you do with those individuals? Do you take Navy SEALs andput them right in there, onto the streets? Is there training forBlackwater?

Mr. PRINCE. The personnel that deploy for us, they go through,obviously we have the resumes, we do a criminal background checkon them. When they have been accepted, when the resume hasbeen accepted by the customer, they come in for training, they gothrough another 164 hours of training, embedding at Blackwater,tactics, techniques, procedures, driving, firearms, defensive tactics.They go through a full psychological evaluation, medical/dentalexam, physical tests, shooting tests. There is a very, very rigorouspre-deployment program they all have to do.

Mr. BRALEY. A significant amount of expense?Mr. PRINCE. Yes. And that is all baked into that daily cost.Mr. BRALEY. Just for the record, when was Blackwater formed?Mr. PRINCE. In 1997.Mr. BRALEY. At what point did you receive your first Government

contract?Mr. PRINCE. For the first number of years, our customers were

individual SEAL platoons or a Marine recon platoon or an A team.It was down to the individual team sergeant or warrant officer pay-ing with a credit card. Our first big Government contract that wewon competitively was the Navy force protection contract that theystarted off after the Cole was blown up. We had a $11⁄2 billion shipblown up by two guys in a Zodiac.

Mr. BRALEY. What year was that?


95

Mr. PRINCE. We started that in 2001.Mr. BRALEY. OK. Who is your client in Iraq?Mr. PRINCE. Department of State.Mr. BRALEY. OK. How many competitors do you have within this

contract?Mr. PRINCE. There are two others. There was a big competition

before then to be down-selected for the WPPS contract.Mr. BRALEY. How is that contract awarded?Mr. PRINCE. It is awarded competitively. You go through an enor-

mous proposal process, they come and inspect your facilities, yourtraining standards, the resumes of each of your personnel. Theyeven have to accept and inspect the resumes of the instructors youare going to have. And they come and audit the program on an al-most weekly basis.

Mr. BRALEY. So let’s go forward. There are roughly 1,000Blackwater contractors, operators, these former veterans that younow have trained that are out securing embassy staff and a num-ber of civilians in Iraq. Let’s say it is 1,000, just for our purposeshere. Roughly how much administrative staff do you have associ-ated with those 1,000 individuals?

Mr. PRINCE. We run that whole program, instructors, programmanagement people, that sort of thing, with less than 50 people.

Mr. BRALEY. With less than 50 people?Mr. PRINCE. Yes, sir.Mr. BRALEY. So roughly it is 1,000 to 50, is the ratio from opera-

tors in the field to administrative staff?Mr. PRINCE. Yes, sir.Mr. BRALEY. All right. Now, there is this notion, we are not the

Armed Services Committee here, but there is this notion of toothto tail ratio, which means how many operators do you have in thefield and the expense of them, how much administration functiondo you have. In active duty military, based on your recollection,what is that rough estimate?

Mr. PRINCE. What is the DOD’s tooth to tail ratio?Mr. BRALEY. Yes.Mr. PRINCE. I have seen as high as 8 to 1 or even 12 to 1. One

tooth, 8 to 10, 12 tails.Mr. BRALEY. So one individual in the field, 12 individuals outside

of operating. So the ratio, when these people on the committee talkabout the expense of having that one operator in the field, it is farless for an individual contractor, when you are a private securitycontractor like you are in Iraq, it is far more efficient for the totalprogram to have a contractor, because their tooth to tail ratio is farbetter than what it is in the active duty military.

Therefore, the cost of that one operator in the field for all thesupport services they have associated with them is far less for acompany like Blackwater than it is for the active duty military.And can you, and my time is up, but if you can actually discussthis with the committee and maybe in a minute or so explain theexpense of the overall operations.

Chairman WAXMAN. The gentleman’s time is up, but Mr. Prince,you may go ahead and answer.

Mr. PRINCE. I would just encourage the committee, and would behappy to make some suggestions on areas where you could do a


96

true activity-based cost study, what does it cost the U.S. Govern-ment to do X, Y, Z functions in the field, and do an accurate drill-down. Because unless you know what something costs, everythingbefore that or after that is hyperbole.

Mr. BRALEY. Is it your contention that it is far cheaper——Chairman WAXMAN. The gentleman’s time really has expired.Mr. BRALEY [continuing]. For you to operate in the field? I just

want him to answer this question, if I could, Mr. Chairman. Is ityour contention that it is much cheaper to the taxpayers for youractivities as a contractor with the Department of State than itwould be for active duty military to do the very same task becauseof that tooth to tail ratio?

Mr. PRINCE. Yes, and because it is tough for the military to beall things to all people all the time. If they are going to have airdefense artillerymen, all the other conventional warfare specifica-tions they have to have, it is tough for them to do all things allthe time.

Chairman WAXMAN. If you have some kind of document thatbacks up your statement, we certainly would like to see it, and wewould like to ask you to provide it to our committee.

Mr. PRINCE. Yes, sir.Chairman WAXMAN. Thank you.Ms. McCollum.Ms. MCCOLLUM OF MINNESOTA. Thank you, Mr. Chair. Mr.

McHenry and I had the opportunity to go to Afghanistan together,where in fact the military did provide, when we went out on visits,did provide our security. I also had the opportunity of being inIraq, where we had a private security detail take us from point topoint. And I just, there has been some discussion about who ismore caring about getting on the ground and seeing what is goingon, and I just wanted people to know for the record here that Ihave been both places and under both circumstances.

I would like to followup a little more on what Mr. Braley wastalking about. You provided this chart on contractor accountability.And you have made the statement that the DOD can bring chargesagainst your contractors. Can the Department of State bringcharges against your contractors?

Mr. PRINCE. I believe that would be done by the Justice Depart-ment. They do the prosecuting of those laws.

Ms. MCCOLLUM OF MINNESOTA. Under the CPA Order 17, con-tractors have immunity from the Iraqi legal system, is that correct?

Mr. PRINCE. That is my understanding, yes.Ms. MCCOLLUM OF MINNESOTA. So if a Blackwater contractor

would commit, as what an investigation might determine would bemurder, on their own time, it was a Christmas Eve holiday thatyou were describing, or Christmas holiday, do you believe the Iraqigovernment would not be able to charge that individual with acrime, even on their own time?

Mr. PRINCE. That is my understanding, yes.Ms. MCCOLLUM OF MINNESOTA. Do you believe that immunity

should be repealed, if something happens when someone is ‘‘offduty’’ and an Iraqi is murdered?

Mr. PRINCE. I believe U.S. laws should be enforced, and you canhave that justice system back here in America work.


97

Ms. MCCOLLUM OF MINNESOTA. So you believe that the immu-nity under CPA Order 17 should stand?

Mr. PRINCE. I believe so. I am not sure any foreigner would geta fair trial in Iraq right now. I think they would at least get a fairtrial here in the United States.

Ms. MCCOLLUM OF MINNESOTA. Your charts indicate that con-tractors are accountable under the Uniform Code of Military Jus-tice. Your contractors work for the Department of State. Is the De-partment of State accountable under the Uniform Code of MilitaryJustice?

Mr. PRINCE. I will not be presumptuous to answer for the De-partment of State, ma’am.

Ms. MCCOLLUM OF MINNESOTA. Well, you have provided this.You told Mr. Braley that all your employees are under this chart.So then you are saying that——

Mr. PRINCE. Well, ultimately that is for the Justice Departmentto decide which avenue of jurisdiction they have.

Ms. MCCOLLUM OF MINNESOTA. So this is just what you feel thatpeople might be held under accountability with your contract? Thisis just a feeling you have? You don’t know any of that for a fact,do you?

Mr. PRINCE. I have legal opinions that I respect, put that to-gether and they gave their opinions that those were laws thatState Department contractors, DOD contractors, contractors for theU.S. Government could be held accountable under.

Ms. MCCOLLUM OF MINNESOTA. So whether it is a feeling or anopinion, you cannot state for a fact, for a fact, that any of your con-tractors that have a State Department contract can be held ac-countable under the Uniform Code of Military Justice?

Mr. PRINCE. That is correct, ma’am, because that is for the Jus-tice Department to decide.

Ms. MCCOLLUM OF MINNESOTA. I think that is important to clearthat up. Do you operate in a military capacity or a civilian capac-ity?

Mr. PRINCE. Civilian capacity.Ms. MCCOLLUM OF MINNESOTA. So now you are saying that

civilians——Mr. PRINCE. Our men are not serving members of the U.S. mili-

tary.Ms. MCCOLLUM OF MINNESOTA. So you are saying that civilians

can be held accountable to the Uniform Code of Military Justice inyour opinion?

Mr. PRINCE. And I believe that is why they extended that, notjust to wars that were declared but also to contingency operationsas well.

Ms. MCCOLLUM OF MINNESOTA. To your knowledge, have therebeen any military courts or civilian courts that have held any ofthe contractors who have been charged or been accused of a crimein Iraq?

Mr. PRINCE. It is my understanding there is a conviction of a con-tractor that was working for the CIA that was convicted in NorthCarolina for actions in Afghanistan.

Chairman WAXMAN. The gentlelady’s time is expired.


98

Ms. MCCOLLUM OF MINNESOTA. Thank you, Mr. Chairman.Thank you for answering my questions. I appreciate it.

Chairman WAXMAN. Mr. Jordan.Mr. JORDAN. Thank you, Mr. Chairman.Mr. Prince, I too want to thank you for your service to our coun-

try and for the good work that your company has been doing inIraq and Afghanistan.

I just want to pick up on a couple of things that the Congress-man from North Carolina had talked about, just some generalquestions. I know you have been sitting there for 3 hours. Just afew questions, then I am going to yield some time to the gentlemanfrom California.

How many employees, you mentioned before a little bit earlier,1,000 in the field, 50 administrative, but does that represent theentire work force at Blackwater?

Mr. PRINCE. We have about 550 full-time folks in the UnitedStates, 1,000, 1,100 or so in Iraq, and then hundreds more in littlepockets around the world. The next greatest concentration wouldobviously be Afghanistan, there are about 300, 400 there.

Mr. JORDAN. So a couple of thousand?Mr. PRINCE. More or less, yes, sir.Mr. JORDAN. And you mentioned the extensive training, some of

the special operations individuals who come to work for you afterthey leave military service and the training they undergo, I believeyou said earlier that there was a study done that shows there isno higher exit rate, or quicker exit rate, we will say, because ofyour company versus what typically happens. Is that true?

Mr. PRINCE. Right. It was a GAO study and it was not just di-rected at us, it was directed at the private security industry.

Mr. JORDAN. And real quickly, in your testimony, your openingparagraph, you talk about you provide training to America’s mili-tary and law enforcement communities who then risk their lives toprotect Americans in harm’s way overseas. So are there severaltypes of contracts that your company does? You do training con-tract with the Government, protective contracts, or do you do onecontract per year? Tell me how those work.

Mr. PRINCE. We have a number of different contracts. We neverstarted this operation to be a security provider. We started as atraining facility. The SEAL teams, special forces, Marine recon,SWAT teams, those were our customers for the first few years. TheNavy came after the Cole was blown up. We have trained well over100,000 sailors since then on how to protect their ships.

Through one of our affiliates, we do aviation support in Afghani-stan.

Mr. JORDAN. Mr. Prince, how many contracts would you haveright now with the Federal Government? Any idea?

Mr. PRINCE. More than 50.Mr. JORDAN. OK.Mr. PRINCE. Some are very small, some are very big.Mr. JORDAN. Again, I want to thank you for your service. And

Mr. Chairman, if I could yield to the gentleman from California.Mr. ISSA. I thank the gentleman.I just wanted to point something out, Mr. Prince. Did you see the

memorandum dated October 1st, that is yesterday, that is entitled


99

Additional Information about Blackwater USA? It comes out of Mr.Waxman’s office, it is 15 pages.

Mr. PRINCE. I did see that, yes.Mr. ISSA. OK. Did you note that on page 5, Mr. Waxman and/

or his staff said the following: ‘‘Blackwater is owned by Erik Prince.Mr. Prince is a former Navy SEAL who owns the company througha holding company.’’ After that, it begins to talk about the WhiteHouse, your father, your father-in-law, your sister, etc., and basi-cally talks about everything I asked you, the Michigan Republicanparty, the donations.

So Mr. Chairman, hopefully you will appreciate that it was yourstaff that created everything that I brought up, and you put it outin writing 1 day before this hearing. My question to you, Mr.Prince, is have you ever seen a bio about your life that starts off,you were a Navy SEAL and then goes on to everything your sisterdid on behalf of the Michigan party and your Republican creden-tials? Is this the first time you have seen a bio like this?

Mr. PRINCE. I love my sister very much, but it is not often ourbios get printed together. [Laughter.]

Mr. ISSA. And you know, it is interesting, because I am noticingthat for this committee, a donor search done on September 29th,at opensecrets.org, was done to find out how much money you gaveto who. Did you know that?

Mr. PRINCE. I did not know that.Mr. ISSA. Do you think that is really germane to today, or do you

think that attempts to paint you as a Republican supporter?Mr. PRINCE. I don’t think it is germane to today. I think we do

good work and I am mighty proud of the folks we have doing thework.

Mr. ISSA. OK, I heard a rumor that your company or someone inyour company had given to the Green Party. Do you know aboutthat?

Mr. PRINCE. It could have been.Mr. ISSA. OK. I just wanted to know that there were people on

both the far left and the far right relative to the chairman whomay have benefited by your company.

But Mr. Chairman, I would ask that page 5 of your memo be con-sidered as what I called it, an attempt to pain this gentleman andhis company through Republican eyes to a Democrat base for politi-cal purposes. And I stand by my statement, Mr. Chairman, andyield back to the gentleman from Ohio.

Mr. DAVIS OF VIRGINIA. Could I just ask one clarification, Mr.Chairman?

Chairman WAXMAN. Yes.Mr. DAVIS OF VIRGINIA. Your first contract, Mr. Prince, Govern-

ment contract, was in 1997, wasn’t it?Mr. PRINCE. Yes. Well, no, our first customer, we started the

business in 1997, first customer was January 1998.Mr. DAVIS OF VIRGINIA. First Federal customer——Mr. PRINCE. That was the SEAL team.Mr. DAVIS OF VIRGINIA [continuing]. That was under the Clinton

administration?Mr. PRINCE. Yes, sir.Mr. DAVIS OF VIRGINIA. Thank you.


100

Chairman WAXMAN. The gentleman’s time has expired.I would like to now recognize Mr. Cooper.Mr. COOPER. Thank you, Mr. Chairman.Mr. Prince, in the charter or by-laws of your corporation, either

the holding company or Blackwater, does it say explicitly that itwill only work for the United States of America or its entities?

Mr. PRINCE. No, it doesn’t. If I could clarify, anything we do forany foreign government, any training, of anything from law en-forcement training to any kind of aviation training, tactical flying,any of that stuff, all of that is licensed back through the State De-partment, another part of the State Department.

Mr. COOPER. But you are the owner of the company, the CEO.If limitations like this are not in the charter and by-laws, isn’tthere a risk that should something happen to you that differentmanagement, in order to maximize profits, might seek contractsfrom any number of other foreign countries, like of Vladmir Putinoffered a lot of money, why would you want to turn that down asa business entity?

Mr. PRINCE. Because we would be violating Federal law and thewhole place could be shut down very, very quickly.

Mr. COOPER. But you are assuming a State Department licensewould apply.

Mr. PRINCE. Oh, it does.Mr. COOPER. You are a regular, private company. You can——Mr. PRINCE. No, sir, I am sorry. We have to have a license to

train——Mr. COOPER. I am not talking about training other people’s pri-

vate police. Say you took some of your former people who wereformer Navy SEALs, special forces, whatever, and they were work-ing for hire, what prevents you in your current company charter orby-laws, prevents you from hiring out those people to foreign gov-ernments?

Mr. PRINCE. U.S. Federal law does.Mr. COOPER. Which law?Mr. PRINCE. Defense Trade Controls Act. Any training, any secu-

rity services, any export of any weapons, any equipment you woulduse to do that job requires a license. And on top of that, this ideathat we have this private army in the wings is just not accurate.The people we employ are former U.S. military and law enforce-ment people, people who have sworn the oath to support and de-fend the Constitution against all enemies, foreign and domestic.They bleed red, white and blue. So the idea that they are going tosuddenly switch after having served honorably for the U.S. militaryand go play for the other team, it is not likely.

Mr. COOPER. But these are independent contractors or employ-ees, they are supposed to do what they are told. And is your omis-sion of this key bit of information from the charter or by-laws onlydue to the fact that it would be redundant? If it is assumed, whydon’t you go ahead and put it in the charter and by-laws that thesepeople, this company will only work for the United States of Amer-ica and its entities? Why wouldn’t that be a nice addition to thecharter and by-laws?

Mr. PRINCE. That wouldn’t make any sense, because we haveNATO allies helping in Afghanistan, helping the U.S. mission


101

there. And there might be opportunities for us to support, providethem with training or aviation support or logistics or construction,a lot of other things that allies need, especially as the UnitedStates is trying to build capacity around the world. There are a lotof countries that need help building out their police departments,giving them more counter-terrorism capability.

Mr. COOPER. Twenty-six NATO allies. So you could work for anyof them?

Mr. PRINCE. Twenty-six NATO allies, but more and more, theUnited States is doing FID missions, foreign internal defense. Wehave done a number of successful programs for them working withthe U.S. Government, where they hire us, we go in and we buildthat capacity and train them and provide the equipment, all ofwhich is licensed by the State Department. When we apply for thatlicense, it goes to the State Department and they farm it out to therelevant part of the DOD to control and authorize that licensing.What is the curriculum going to be, what tactics, even down towhich individual in which country is going to be trained, so theycan do a check on them. So that is all controlled by the U.S. Gov-ernment already, sir.

Mr. COOPER. On your Web site, it says that you were contractedto enhance the Azerbaijan Naval Sea Commandos Maritime Inter-diction capability. Is Azerbaijan a member of NATO?

Mr. PRINCE. No, but that was paid for by the U.S. Government.Mr. COOPER. Well, let me ask another question.Mr. PRINCE. It was part of their regional engagement policy. I

don’t make that policy, sir.Mr. COOPER. Wouldn’t it be nice to put in your charter and by-

laws that you only work for United States or U.S.-approved enti-ties? Why would that be harmful to your company?

Mr. PRINCE. We would be happy to do that. But it is absolutelyredundant, because we can’t work for someone that is not U.S.-ap-proved.

Mr. COOPER. Redundancy is a small objection to making surethat you are a loyal U.S. company.

Let me ask another question. What if a large company inside theUnited States of America wanted to hire your company for services,say, to break a strike or for other purposes like that? Is that al-lowed under your charter and by-laws?

Mr. PRINCE. That is not something we have even explored.Mr. COOPER. But it would be permissible under your current

company charter? It is a new line of business possibly?Mr. PRINCE. No.Mr. COOPER. It might be very profitable?Mr. PRINCE. It is not something we are looking at, not part of

our strategic plan at all, sir.Mr. COOPER. I know, but you are a mortal human being. Your

company would allow it, according to its current charter and by-laws?

Mr. PRINCE. Well, I have five boys I am raising, so one of themperhaps will take over some day.

Mr. COOPER. Why not put it in the charter and by-laws? Thankyou, Mr. Chairman. I see that my time is expired.

Chairman WAXMAN. Mr. Cooper, your time is expired.


102

Mr. Hodes.Mr. HODES. Thank you, Mr. Chairman.Mr. Prince, thank you for being with us today.Mr. PRINCE. Thanks for having me sir. I am glad I could come

here and correct some facts.Mr. HODES. There has been some discussion from the other side

of the aisle about whether or not these hearings are partisan. Doyou agree that it is not a partisan issue to examine whether or notthe use of private contractors, including Blackwater, is advan-tageous to American taxpayers?

Mr. PRINCE. It is certainly part of the Congress to make sure themoney is spent well that taxpayers pay.

Mr. HODES. And do you also agree that it is not a partisan issueto inquire whether failures to hold Blackwater personnel account-able for misconduct undermine our efforts in Iraq?

Mr. PRINCE. It is a fair enough thing to look into.Mr. HODES. Earlier today you were asked what action

Blackwater took to penalize an employee who while drunk, shotand killed and Iraqi security guard for the Iraqi vice president onChristmas Eve of 2006. Do you recall those questions?

Mr. PRINCE. Yes, sir.Mr. HODES. And you responded that Blackwater fired and fined

the employee, but you are not sure of the amount of the fine. Doyou recall that?

Mr. PRINCE. Yes, sir.Mr. HODES. Blackwater, at the committee’s request, provided the

committee an internal Blackwater e-mail that appears to reflect adiscussion of what Blackwater did to this employee. It is datedMonday, January 8, 2007, approximately 2 weeks after the incidentin question. And it says, ‘‘Regarding termination, he has forfeitedthe following compensation that he would have otherwise been au-thorized: return airfare, $1,630; completion bonus, $7,067; 4th ofJuly bonus, $3,000 and a Christmas bonus of $3,000.’’ Now, it ap-pears to me that the so-called fine consisted of taking away thecontractor’s bonuses and making him pay his own way home. Isthat accurate?

Mr. PRINCE. And any forthcoming compensation that he had. Idon’t know when the guy’s contract would have ended, but yes, wetook away whatever else we could.

Mr. HODES. How long had he worked for your company?Mr. PRINCE. I have no idea.Mr. HODES. Do you know what he had been paid during the time

of his employment up to the time he shot and killed the Iraqiguard?

Mr. PRINCE. I have no idea, sir.Mr. HODES. Do you have any idea what your profit on that em-

ployee had been up until the time of this incident?Mr. PRINCE. Probably in keeping with the 10, 101⁄2 percent indi-

cated on our chart.Mr. HODES. Would you have records that would show us what

you had paid him up until that time and from which we could findout what profit you had made?

Mr. PRINCE. I am sure we could dig through that and find it, yes,sir.


103

Mr. HODES. And would you be willing to provide that to us?Mr. PRINCE. I will get my people right on it.Mr. HODES. I am asking for it now, so I would like to have that

sent. Thank you very much.Chairman WAXMAN. Without objection, the document you used

for your questioning will be made part of the record.Mr. HODES. Thank you.[The information referred to follows:]


104


105

Mr. HODES. Mr. Prince, you also said that Blackwater is ex-tremely scrupulous in enforcing your standards. And you have toldus that you did basically all you could to this employee and thatthe rest was up to the Department of Justice. What you did wasyou took away his bonuses, July 4th, completion bonus, Christmasbonus, he paid his own way home and he couldn’t work for you anymore.

Mr. PRINCE. And made sure his clearance was canceled as well.Mr. HODES. Is that your idea, Mr. Prince, of corporate account-

ability?Mr. PRINCE. Could you say the question again, sir, please?Mr. HODES. Is that your idea, Mr. Prince, of corporate account-

ability?Mr. PRINCE. This employee, I can’t make any apologies for what

he did. He clearly violated the rules that he knew. We give eachof our guys an independent contractor handbook. It is all the dosand don’ts of what they are expected to do and not do.

Beyond firing him for breaking the rules, withholding any fundswe can, we can’t flog him, we can’t incarcerate him, we can’t doanything beyond that. That is the sole reservation of the U.S. Jus-tice Department.

Mr. HODES. The Justice Department has not acted against thisindividual?

Mr. PRINCE. I believe their investigation is ongoing.Mr. HODES. They haven’t done anything so far, right?Mr. PRINCE. We are not privy to that information, sir.Mr. HODES. This was a potential murder, was it not?Mr. PRINCE. It was a guy that put himself in a bad situation.Mr. HODES. Would you agree with me that this was potentially

a murder, sir?Mr. PRINCE. Beyond watching detective shows on TV, sir, I am

not a lawyer, so I can’t determine whether it would be a man-slaughter, a negligent homicide, I don’t know. I don’t know how tonuance that. But I do know he broke our rules, he put himself ina bad situation and something very tragic happened.

Chairman WAXMAN. Thank you, Mr. Hodes.Mr. Sarbanes.Mr. SARBANES. Thank you, Mr. Chairman.Actually, I want to followup on that line of questioning a little

bit more. I think you said that when people violate the rules in asignificant way, they have one decision left to make, which is aisleor window, right?

Mr. PRINCE. Because they are fired.Mr. SARBANES. They are on their way out, they have one deci-

sion, and that is whether to sit on the aisle or sit by the window.And then the other consequence that Mr. Hodes spoke to was the

financial penalty that they would experience. But it just seems likea few thousand dollars, particularly against a pretty lucrative con-tract that they would have had. And it strikes me that if that isthe only deterrent that is at work in terms of people performing ata high level, that is not much. In other words, you can say, well,let me get in here, let me make a good living here. And if I screwup, and if I screw up in a terrible way, as this one incident illus-trates, then the worst that is going to happen to me is I am going


106

to have to choose between an aisle seat or a window seat andmaybe give up a bonus and my last paycheck, I mean, that is es-sentially the consequence that they face, isn’t that right?

Mr. PRINCE. I would also add that we endeavor to get their secu-rity clearance pulled, canceled. And once that is done, they willnever work in a clearance capacity for the U.S. Government again,or very, very unlikely.

Mr. SARBANES. OK. But you would agree that it is not, it doesn’thave the same kind of deterrent effect that it would have if theythought that they were going to be subject to prosecution, if therewas a clear set of rules in place, a clear context in which they couldbe prosecuted, they could face something akin to a court martial,or all the other kinds of measures that can occur if you are in atraditional military setting? You would agree that provides anextra level of deterrence?

Mr. WESTMORELAND. Mr. Chairman, I think the witness has al-ready testified that he did everything that his company could tothis person——

Chairman WAXMAN. I’m sorry——Mr. WESTMORELAND [continuing]. And that he is not the prosecu-

tor.Chairman WAXMAN [continuing]. You are not acting in accord-

ance with the rules.Mr. SARBANES. Well, I am actually, I am headed in the

direction——Chairman WAXMAN. This is not a court case. The gentleman has

time and I am going to restore his time. He can ask whatever hewants and to say whatever he wants. Some people on this commit-tee have said completely outlandish things. Nothing we can doabout it. They have their right, including you. You read a wholeblasphemous statement about Democrats, but no one objected tothat.

So the gentleman is going to be recognized for an additionalminute.

Mr. SARBANES. In any event, would you agree that would providesome extra deterrence, some extra reason for people to exercisetheir conduct in a careful way?

Mr. PRINCE. We welcome that level of accountability. Most of ourpeople have already served in the U.S. military or they served ina law enforcement capacity. They are used to that kind of account-ability and transparency into what they are doing.

Mr. SARBANES. Well, I appreciate your saying that, because I——Mr. PRINCE. We are not hiding anything.Mr. SARBANES. Yes. I would like to leave aside the question of

whether you should be, Blackwater should be in this space that youare in. I don’t know enough about the history of whether providingthe sort of protective services that you do is something that isn’tdone by the military traditionally, or is. So I am going to leave thataside. I am also leaving aside the issue of the cost, which strikesme as exorbitant, in terms of what the taxpayers are paying here.You keep calling for, I think, an activity-based cost analysis or as-sessment, which I think we would be happy to get more informa-tion about. I have to believe there is a less expensive way, even tohire private contractors like yourself.


107

And so I am really left with the accountability issue as the onethat strikes me as front and center here. And as I have listenedto your testimony, in particular you are saying with respect to thisone person who was drunk and committed this homicide, I willcharacterize it that way, I think you said you would be happy tosee that person prosecuted, something akin to that. And I wouldlike to enlist you as an advocate to strengthen whatever the rulesof engagement are, whatever the statutes are that are out there.Mr. Braley took us through these various things and you indicatedthat you weren’t sure whether each of those necessarily reached asfar as they could in providing that kind of penalty environment. Iwould like you to speak to whether it would be a good thing tomake sure that it does.

Mr. PRINCE. I believe Congressman Price from North Carolinahas been pushing to amend some of that language. And we supportthat fully.

Mr. SARBANES. Thank you.Mr. COOPER [presiding]. The gentleman yields back his time.The next questioner on the list from the chairman looks like Mr.

Welch.Mr. WELCH. Thank you, Mr. Chairman.Mr. Prince, thank you for coming. I want to ask a few questions

about the finances. My understanding is that Blackwater had con-tracts with the Federal Government in 2001 in the amount of$736,000.

Mr. PRINCE. It could easily be, yes, sir.Mr. WELCH. And in 2006, that number had exploded to $593 mil-

lion.Mr. RYAN. May I have just 1 minute, please?Mr. PRINCE. I am not sure.Mr. WELCH. Well, you don’t dispute it. This is what is in the re-

port that was referred to earlier.Mr. PRINCE. Well, some of the later years on that report aren’t

quite accurate. So I am not going to discount the whole thing.Mr. WELCH. OK. According to the report, 51 percent of the

Blackwater contracts were no-bid contracts, $493 million that wereexplicitly no competition, and $30 million were awards after limit-ing or excluding qualified bidders. Is this more or less correct? Anyreason to dispute it?

Mr. PRINCE. It could be, sir. I don’t know.Mr. WELCH. All right. And since 2003, when the war began,

Blackwater contracts have exceeded $1 billion, correct?Mr. PRINCE. I don’t know the answer, sir. If you have specific

questions on financials, we will get you the answers.Mr. WELCH. Well, these are facts that are in the record. You can

check them out. But I will just advise you——Mr. PRINCE. Well, there is some stuff in the committee’s report

that is not accurate. So I can’t agree to the entire committee report.Mr. WELCH. Let me continue going through this. One of the con-

cerns that has been expressed is that a sergeant who provides se-curity services in a full military setting is paid $50,000, $60,000.If it is an employee from Blackwater, the cost to the taxpayer isabout $445,000. Is that more or less correct?


108

Mr. PRINCE. Could I have a copy of what you are reading from,at least?

Mr. WELCH. Well, you have been asked about this by severalMembers already. Let me just continue.

Let’s talk a little bit about training. You were a SEAL andserved with distinction, as I understand it, as a SEAL, correct?

Mr. PRINCE. Yes.Mr. WELCH. And your training as a SEAL was beneficial to you

in the work that you are doing now as the head of this company?Mr. PRINCE. It helped form me in my life, absolutely.Mr. WELCH. And you had also I think indicated that Blackwater

hires our military veterans and law enforcement veterans, many ofwhom have recent military deployments, correct? It makes sense todo that?

Mr. PRINCE. Yes.Mr. WELCH. So it is fair to say that Blackwater as a company

in recruiting personnel has benefited from the taxpayer-financedtraining of people that Blackwater hires, correct?

Mr. PRINCE. We have people that have prior honorable militaryservice and provide them an opportunity to use those skills againat their highest and best use.

Mr. WELCH. And it is fair to say that Blackwater contracts havein fact surged since 2003 when the war began, correct?

Mr. PRINCE. The nature of the security environment around theworld has changed, yes.

Mr. WELCH. And it is true, or is it true that as reported by theCenter for Responsive Politics, you did make, as you have a rightto make, contributions of $225,000 to the, that include $160,000 tothe Republican National Committee and the National RepublicanCampaign Committee?

Mr. PRINCE. I don’t know that sitting here right now. Again, Ican go back and dig through our contribution records to figure outexactly what we gave in what period.

Mr. WELCH. Well, that is the report that we have been given.And again, you have a right to do that. My concern is the natureof the contracts.

Now, you are also aware that General Petraeus, who is in com-mand of 160,000 troops, is paid by taxpayers $180,000 for the ex-traordinary responsibilities that he bears for our security in Iraq,correct?

Mr. PRINCE. I don’t know what General Petraeus gets paid.Mr. WELCH. Well, that is what it is. Blackwater has 861 or so

personnel, according to this report in 2006, in Iraq. Is that moreor less right?

Mr. PRINCE. It could be, yes, sir.Mr. WELCH. All right. General Petraeus is paid $180,000 for su-

pervising 160,000 troops. How much were you paid in 2006?Mr. PRINCE. I’ll get back to you with that exact answer. I don’t

know.Mr. WELCH. Well, you can give me an estimate.Mr. PRINCE. More than $1 million.Mr. WELCH. Well, as I remember, when my colleague, Mr.

Hunter, asked you about your contracts, you indicated 90 percent


109

of your Blackwater contracts came from the Federal Government,correct?

Mr. PRINCE. Yes.Mr. WELCH. I.e., the taxpayer. And he asked you what your prof-

it margin was, and my recollection of your testimony today wasabout 10 percent?

Mr. PRINCE. That is what the report that we submitted to thecommittee says, yes.

Mr. WELCH. So walk through the math with me. If Blackwaterhas had $1 billion in contracts since the war began in 2003, andthere is a 10 percent profit margin, that is $100 million in profit,is it not?

Mr. PRINCE. This is representative of one of the WPPS contracts.Some contracts we lose money on, some we lose all kinds of moneyon. Some we make money on.

Mr. WELCH. Mr.——Mr. PRINCE. Understand we have significant variables.Mr. WELCH. You were asked a question and you gave an answer.

And the question was very simple. It is the kind of question thata CEO pays real attention to: what is your profit margin. Your an-swer was, 10 percent. I am doing the math, $1 billion, 10 percent,$100 million.

Mr. COOPER. The gentleman’s time is expired.Mr. PRINCE. Some contracts we lose money on. Losing three heli-

copters this year is certainly beyond the scope of math.Mr. COOPER. The next questioner is Mr. Murphy.Mr. MURPHY. Thank you very much, Mr. Chairman.Let me just followup on Mr. Welch’s question. Certainly, as a

CEO of a company, you can tell us what your profit has been inthe past several years as a company.

Mr. PRINCE. I can give approximate numbers, but we are a pri-vate company. And I am sure it is the Congress’s main interest inmaintaining healthy competition amongst Government vendors. Sowe are a private company, and there is a key word there, private.

Mr. MURPHY. And so you will not disclose to us what the profit,what the annual profit or——

Mr. PRINCE. No, that is not what I just said. We gave you an ex-ample of what the profitability of a WPPS contract looks like. ButI am not going to go into our full financials.

Mr. MURPHY. And I guess, I am a new Member of Congress, butas a representative of my constituents that pay 90 percent of yoursalary, pay 90 percent of the salaries of your employees, I think itis a little difficult for us to fathom how that information isn’t rel-evant to this committee or this Congress.

Mr. RYAN. Mr. Chairman, may I have a minute with the witness,please?

Mr. COOPER. Yes.[Witness and counsel confer.]Mr. PRINCE. I am sorry. Go ahead.Mr. COOPER. Mr. Murphy has 4 minutes left. The hearing will re-

sume.Mr. MURPHY. Thank you, and I want to wrap up so Mr. Lynch

can ask some questions before we break. So let me ask the questionagain after your consultation with your colleague. It is your posi-


110

tion that you don’t believe that it is in the best interests of yourcompany or this committee to have discussions with the U.S. Con-gress about the profit that you make off of U.S. Government con-tracts?

Mr. PRINCE. We can have that discussion, but I am not fully pre-pared, sitting here today, to answer each and every one of yourquestions down to that level of detail.

Mr. MURPHY. I am not asking for a level of detail. I am askingfor an approximation of your annual profit, based on the fact thatyou make 90 percent of your money from U.S. taxpayers.

Mr. PRINCE. Again, we will come back to you. If you have writtenquestions, we will give you written answers after the hearing isdone.

Mr. MURPHY. Because you testified today that you are not sureof that number?

Mr. PRINCE. I am not sure of that number. How can I calculatein depreciation on assets when our helicopters parked around nearthe embassy in Baghdad get hit by rockets all the time, that theyget fragged, that three of them have been shot down? There is awhole host of variability to our profitability, depending on when anasset is expended or destroyed.

Mr. MURPHY. Mr. Prince, I am not a businessman. But I find itpretty hard to believe that the CEO of a major company in thiscountry, whether it be privately financed or publicly financed, can’tgive an approximation of your annual profit on a year to year basis.

Mr. PRINCE. I think when the committee meets with any of myfinance folks, they will tell you I am not a financially driven guy.

Mr. MURPHY. Let me just ask one other quick question before Iyield back. You made a comment before that you had a handful ofthird country nationals working for you. And not to disparage theneed to have third country nationals working for the company, butI just want to get a better handle on what a handful has. Thememo that we have before us, and I understand you draw issuewith some of those numbers, so I want to get it straight, suggeststhat of the 861 Blackwater personnel in Iraq today, 243 of themare third country nationals. Does that sound right?

Mr. PRINCE. Your best bet is drawing off of page 1 of what wesubmitted to the committee, where it says, ‘‘UCTCN or HCN.’’

Mr. MURPHY. What percentage of those serving in Iraq underBlackwater are third country nationals? By your numbers. Becauseby our numbers, it is just less than one third, which doesn’t soundlike a handful. That sounds like one third of all your personnel arenot U.S. citizens.

Mr. PRINCE. Well, I am looking at one here. It shows 576 UnitedStates, 129 TCN and 16 locals.

Mr. MURPHY. So again——Mr. PRINCE. So divide 129 by 576 and you get your percentage.Mr. MURPHY. OK. Sounds like a little bit more than a handful,

but I appreciate your testimony and I yield back.Mr. COOPER. The gentleman yields back his time. The next ques-

tioner is Mr. Lynch.Mr. LYNCH. Thank you, Mr. Chairman. And I want to thank the

witness for his perseverance here today and for helping the com-mittee with its work.


111

We have heard a lot today about the loss of accountability whenan inherent Government function, in this case duties that are inci-dental to the prosecution of war, are subcontracted out to privateentities. And as Mr. Shays and Mr. Platts have mentioned earlier,my Republican colleagues, I also have had an opportunity to viewfirst-hand on more than a few occasions the work of Blackwateremployees. I would guess that in the dozen or so occasions whenI have traveled with my colleagues to Iraq and Afghanistan, yourarea of operations, principally, I would bet at least half of thosetimes, or at least a portion of time there, we have been protectedby Blackwater employees.

And based on my own personal experience, I have to say, frompersonally what I have seen, and what I have experienced, thosepeople who were protecting us who were Blackwater employees dida very, very good job. I have to give you credit for that. They arebrave employees, brave Americans in a very hostile environment.

I find myself right now with this committee having a difficulttime criticizing those employees, because I am in their debt. Thatis a very hostile environment and they do a good job on our behalf.

Which brings me to my problem. If I have a problem criticizingBlackwater and criticizing the employees and some of the timesthat you have fouled up, what about the State Department? TheState Department employees, you protect them every single day.You protect their physical well-being, you transport them, you es-cort them. And I am sure there is a heavy debt of gratitude on thepart of the State Department for your service.

And yet they are the very same people who are in our system re-sponsible for holding you accountable in every respect with yourcontract and the conduct of your employees. And I know from myown experience, in the time there, that is an impossible conflict forthem to resolve.

I have here in my possession, I am going to ask that they be en-tered into the record in a minute, some internal e-mails from theState Department. These documents that the committee has re-ceived raise questions again about the State Department’s over-sight of Blackwater’s activities under the contract. Even in thecases involving the death of Iraqis, it appears that the State De-partment’s primary response was to ask Blackwater to make mone-tary payments to—this is from the e-mails—‘‘to put these mattersbehind us,’’ that is, the deaths of Iraqi civilians, ‘‘rather than to in-sist upon accountability or to investigate Blackwater personnel forpotential criminal liability.’’ The most serious consequence faced bya Blackwater personnel for misconduct appears to be terminationof their employment.

Even though Secretary of State John Negroponte asserted thatevery incidence in which Blackwater fires its weapons is ‘‘reviewedby management officials to ensure the procedures were followed,’’the documents that we have before the committee don’t indicatethat. I do have some e-mails, though. And this one is dated—I willask these to be entered into the record, Mr. Chairman.

Mr. COOPER. Without objection, so ordered.[The information referred to follows:]


112


113


114


115


116


117

Mr. LYNCH. This one is dated July 1, 2005 from RSO Al-Hillah.This is a situation where Blackwater personnel fired and killed. Itsays, ‘‘This morning, I met with the brothers of an adult Iraqi malewho was killed by a gunshot to the chest at the time and locationwhere the PSD, in this case, Blackwater team, fired shots in Al-Hillah on Saturday, June 25th of 2005.’’ The gentleman in questionwas killed. And then it says, ‘‘Gentlemen, allow me to second thecomments on the need for Blackwater to provide funds ASAP. Forall the reasons enunciated in the past, we are better off getting thiscase and any similar cases behind us quickly. Again, the Depart-ment of State needs to promptly approve and fund an expeditedmeans of handing these situations. Thanks.’’ And it mentions$5,000 for the family there.

Again, another e-mail dated December 26, 2006. And it says, thisis again a situation where Blackwater personnel killed an individ-ual civilian innocently, standing near an area where the convoywas traveling, it criticizes the way the charge d’affaires was talkingabout ‘‘some crazy sums. Originally she mentioned $250,000 andlater, $100,000. Of course, I think that a sum this high will set aterrible precedent. This could cause incidents with people trying toget killed by our guys to financially guarantee their families’ fu-ture.’’

Mr. COOPER. The gentleman’s time has expired.Mr. LYNCH. I am going to wrap up here. And again, I am going

to ask these to be placed in the record.Mr. COOPER. I am afraid——Mr. LYNCH. The question is, based on that arrangement——Mr. COOPER [continuing]. The gentleman’s time has expired.Mr. LYNCH [continuing]. Does it not make sense that an inde-

pendent inspector general, instead of the State Department inspec-tor general, review these? I think it would help the credibility ofthe company to have an independent inspector general reviewingthese cases instead of having the State Department basically makeyou pay up $5,000 every time——

Mr. BURTON. Mr. Chairman, I have high regard for the gen-tleman from Massachusetts but has gone 2 or 3 minutes over histime.

Mr. COOPER. The gentleman’s time has expired.I need to ask the witness, we have two questioners remaining.

If you would like to take a break now, that would be fine. Or thereare about 10 minutes of questions remaining. It is your call.

Mr. PRINCE. If there are two questions left, I will take them andlet’s be done.

Mr. LYNCH. Mr. Chairman, do you want to give the witness achance to answer that last question?

Mr. COOPER. Well, the gentleman considerably exceeded his timelimit. We had actually given you considerably more than the 5-min-utes due to a mistake in the clock. So I think we need to keep thisin regular order.

The gentlelady is recognized, Ms. Norton.Ms. NORTON. Thank you, Mr. Chairman.Mr. Prince, I want to be clear that however you serve your coun-

try, whether as a member of the armed forces or now as a contrac-


118

tor in time of war, the American people are indebted to you. Weunderstand that the risk is the same.

I want to avoid confusing the higher purpose of the volunteerarmy with what some nations, how some nations candidly operate.However you define mercenary armies, some nations have longused mercenary soldiers to deal in foreign countries with unpleas-ant tasks. The more dependent we become on contractors, the morewe risk falling right off the cliff into a mercenary army that isnothing that you would have responsibility for.

But it must be said, people fight wars that, countries fight warswhere the people support them. And the people support them bybeing willing to provide the troops to fight those wars. That is arisk we have.

I want to ask you a question or two about your contract with theState Department. Under this contract, you employ security per-sonnel as independent contractors rather than as your own directemployees, isn’t that right?

Mr. PRINCE. Yes, ma’am.Ms. NORTON. You don’t have to provide employee benefits, such

as health or disability insurance, vacation or retirement and thelike as a result?

Mr. PRINCE. Each of the individuals that deploys for us has avery robust insurance package that is with them every day theyare working for us.

Ms. NORTON. You also can avoid making Social Security con-tributions or withholding taxes, is that not true?

Mr. PRINCE. I am not sure on that.Ms. NORTON. I believe that is true, sir.By contrast, DynCorp and Triple Canopy and other security

firms that support the State Department treat their personnel asemployees entitled to these benefits. Why do you treat your person-nel differently from these two companies?

Mr. PRINCE. I don’t know the differences in how they compensatetheir people. I will tell you we have the highest retention in theindustry. We have guys that sign up for us at a very, very highrate. So we don’t get losses. Men and women seem to feel very welltreated by us.

Ms. NORTON. Well, of course one of the differences is in the em-ployee benefit package I have just named. Does Blackwater hirepersonnel as independent contractors in order to avoid legal re-sponsibility for the company?

Mr. PRINCE. No, it is actually really what the men that deployfor us prefer. We find it is a model that works.

Ms. NORTON. Well, Mr. Chairman, it may in fact——Mr. PRINCE. They like the flexibility of signing on for a certain

period of time and being able to schedule their off time around ananniversary, a child’s birthday, being home for Christmas, etc. Soit gives them flexibility as to when they are going to deploy, whenthey are going to go to work. Just like——

Ms. NORTON. Does it really give them more flexibility than theother two companies who have them as employees? Those peopledon’t have the same kind of flexibility? What kind of flexibility canyou have if you need your employees at a time of engagement, forexample?


119

Mr. PRINCE. I don’t know, ma’am.Ms. NORTON. Well, I think the fact is, when you need them, you

need them. You don’t say, you can go home for Christmas, sir.Mr. Chairman, I think we should, I am very disturbed, very dis-

turbed by this confusion, which amounts to legal confusion aboutthe responsibilities of contractors. I will concede the notion thatemployees can choose whether they want to work for a companythat in fact requires them to save for their own benefits or not. Myconfusion——

Mr. PRINCE. Ma’am, let me just add, we have a program that al-lows them, it is like an individual 401(k) plan. So they are able to,while working for us, able to have a 401(k)-like program.

Ms. NORTON. I understand that. Probably the other employees,excuse me, companies, that I mentioned probably also have 401(k)programs. And again, my major concern is not what private em-ployees decide to do.

Mr. Chairman, my concern is that these Blackwater contractors,so far as I can see, operate under the direct command or are super-vised by Prince, Mr. Prince and his company. They are, they oper-ate under the law of the United States in some fashion. It is simplyunclear, after a full day’s hearings, whether these employees,whether this company is subject to law in the way that the Amer-ican people expect anybody in a field of combat to in fact be subjectto the law of some place. I believe we need an investigation, Mr.Chairman, by the GAO to clarify what law if any such companiesand their employees, whether contract employees or not, should an-swer to.

Mr. PRINCE. If I could just answer, ma’am, I think the FBI inves-tigation regarding the September 16th incident proves that thereis a measure that accountability is in place, that process is work-ing. And as for us——

Chairman WAXMAN [presiding]. That remains to be seen.Mr. PRINCE [continuing]. Working for us overseas, we provide the

trained person with the right equipment, the right training, the lo-gistics to get them in and out of theater, when they get to Iraq orto Afghanistan, they work for the State Department. We workunder that, the RSO’s operational control, they are not under ouroperational control.

Chairman WAXMAN. Thank you, Ms. Norton.Ms. Schakowsky.Ms. SCHAKOWSKY. Thank you, Mr. Chairman. I really appreciate

your allowing me to participate in this hearing, and I thank thecommittee for their indulgence.

I wanted to let everyone know that I am shortly going to be in-troducing legislation to carefully phaseout the use of private secu-rity contractors, for-profit companies that carry out sensitive mis-sions that have repeatedly and dramatically affected our mission.I want to recognize the mother of Jerry Zovko, who is here today.Jerry was an Army Ranger before becoming a Blackwater em-ployee. He died in Fallujah in an infamous mission, fraught withmistakes on the part of his Blackwater supervisors. That was over31⁄2 years ago, and led to the Battle of Fallujah during which manyof our U.S. forces lost their lives.


120

As Mr. Davis, the ranking member, said, we need a conversationin this Congress about that, and I am hoping that my legislationwill provide that.

Mr. Prince, in your testimony you stated Blackwater personnelsupporting our country’s overseas missions are all military and lawenforcement veterans. You did not state that they were all Ameri-cans, all American military and law enforcement veterans. Is ittrue that Blackwater hires foreign security personnel?

Mr. PRINCE. One of your colleagues previously asked that ques-tion. Yes. Some of the camp guards, gate guards, static locationsare indeed third country national soldiers.

Ms. SCHAKOWSKY. And in 2004, Gary Jackson, the President ofBlackwater USA admitted that your company had hired formercommandoes from Chile to work in Iraq, many of which servedunder General Augusto Pinochet, the former dictator of Chile. Asyou must know, his forces perpetrated widespread human rightsabuses, including torture and murder of over 3,000 people. DidBlackwater or any of its affiliated companies at that time, at anytime, use any Chilean contractors with ties to Pinochet?

Mr. PRINCE. Well, I can say Mr. Jackson did not admit to hiringsome commandoes. Yes, we did hire some Chileans. Any foreign na-tional soldier that works for us now, for the State Department, hasto have a high public trust clearance. It is basically a securityclearance for a third country national soldier where you take theirname, it goes back through the U.S. embassy in that country andtheir name is run, kind of like a national agency check here, whichis what someone does for a security clearance. That way we can en-sure that they have no criminal record, ma’am.

Ms. SCHAKOWSKY. I understand that one of your business associ-ates, Jose Miguel Passaro, was indicted in Chile for his role in sup-plying commandoes to serve Blackwater. Is that correct?

Mr. PRINCE. He was not an associate. He might have been a ven-dor to us.

Ms. SCHAKOWSKY. In your written statement today, you statethat Blackwater mandates that its security professionals have a se-curity clearance of at least the secret level. Did any Chilean con-tractors who worked for Blackwater ever get a security clearance?

Mr. PRINCE. I believe what I said is for the WPPS contract, theAmericans working on that are doing the PSD mission are requiredto have a secret clearance.

Ms. SCHAKOWSKY. Did any Chilean contractors get a securityclearance?

Mr. PRINCE. I don’t know, ma’am.Ms. SCHAKOWSKY. Because if yes, they were provided with classi-

fied information, if no, then it is not true that all Blackwater per-sonnel in Iraq have security clearances.

On your Web site, I don’t know if it is still there, there was arecent one, there was a jobs fair advertised in Bucharest. And wehave heard allegations that Blackwater recruited Serbians andformer Yugoslavs with combat experience from the Balkan wars,some linked to atrocities committed in Croatia and Kosovo and inBosnia and associates of Milosevic. I am wondering if you couldtalk to me about that for a minute.


121

Mr. PRINCE. To my knowledge, we have never employed anyoneout of those countries.

Ms. SCHAKOWSKY. Would you know?Mr. PRINCE. There are some Romanians that were on a contract

that we took over from a previous vendor, competitor. But wephased them out and we use guys out of Latin America now.

Ms. SCHAKOWSKY. Would you know if people have been associ-ated with Pinochet or Milosevic before you hired them? Is this partof your inquiry?

Mr. PRINCE. Again, for the State Department, for the staticguards that were utilized, third country national soldiers, a highpublic trust clearance is required——

Ms. SCHAKOWSKY. I heard you say that.Mr. PRINCE [continuing]. Where their name, their background,

their address, their date of birth, whatever information is availableon them, is run back through the equivalent country that they arefrom, a national agency check, to ensure that they don’t have anycriminal record, human rights abuses, or any other bad marksagainst their name.

Ms. SCHAKOWSKY. OK, well, we should check into that process.But let me ask a question. You said that you as a company wouldnot work overseas in any way that is not associated, that theUnited States does not approve. However, Chile has made a deci-sion not to participate as part of a coalition member in this war.They won’t send any troops. Do you have any qualms about hiringpeople out of Chile to participate actively in this war?

Mr. PRINCE. We don’t hire anybody from Chile right now, to myknowledge.

Ms. SCHAKOWSKY. Have you ever?Mr. PRINCE. I previously just said that we had, previously. Yes.Ms. SCHAKOWSKY. And so the answer is you don’t have any

qualms about doing that, based on the fact that Chile has made apublic policy decision not to participate?

Mr. PRINCE. I believe the persons of that country have a freeright to contract. I will give you an example. The Philippinesdoesn’t allow their personnel to go to Iraq. So we don’t hire theirpeople to go to Iraq.

Ms. SCHAKOWSKY. OK, but you do hire Chileans. Thank you. Iappreciate it.

Chairman WAXMAN. Thank you very much, Mr. Schakowsky.Mr. Prince, let me thank you very much. You have been very pa-

tient. You have been here a long time.I do want to acknowledge the presence today of Rhonda Teague

and Kristal Batalona, the daughter and wife of Wesley Batalona.Ms. Schakowsky acknowledged the mother of Jerry Zovko, who isin the audience today. These are people from Fallujah. I am sorrywe didn’t get a chance to ask you more questions about Fallujah.I might, with your permission, send you some questions and askyou to respond for the record.

Because that was an example, we had a hearing on that issue,and that was an example where one of the ways corporations couldmake money is not to have fully trained personnel. I don’t knowif that was the case or not, but it certainly appeared to us that thepeople were not given adequate protection and training for that


122

Fallujah mission and it had an unprecedented consequence in thebattle of Fallujah that followed.

In closing, let me just say that we really have a remarkably un-precedented experiment going on in the United States today byhaving private military contractors. It raises a lot of issues. Itraises issues about costs, it raises issues about whether it inter-feres with our military objectives. And I think this hearing andwith you and the next witnesses will help us continue to sortthrough what that means for our Nation. We have never had any-thing of this magnitude before where we have turned so much ofour military activity over to private military that used to be, for themost part, provided by the U.S. military itself.

I want to thank you. If Mr. Davis has any last comments, I willrecognize him.

Mr. DAVIS OF VIRGINIA. Mr. Prince, thank you very much. I thinkyou have—is there anything else you would like to add after allthis? Would you like to add anything you didn’t get to say?

Mr. PRINCE. Thanks for having me. I would invite some of theleadership of the committee, if they would like, to come and visitour operations. We would be happy to show you what we do.

Mr. DAVIS OF VIRGINIA. Fine. Let me just say, I think we do needa dialog, and our next panel will tell us the State Department’s ra-tionale and the large number of contractors and why they are uti-lizing that versus active duty. I think that will give more clarifica-tion to Members.

Thank you very much.Mr. PRINCE. Thank you, sir.Chairman WAXMAN. We will proceed to our next panel, but we

want to give Mr. Prince and his group an opportunity to leave.The committee will now continue on and proceed to our second

panel. We have with us Ambassador David M. Satterfield, SpecialAdvisor and Coordinator for Iraq, U.S. Department of State; Am-bassador Richard J. Griffin, Assistant Secretary, Bureau of Diplo-matic Security and Director of the Office of Foreign Missions, U.S.State Department; and Mr. William H. Moser, Deputy AssistantSecretary for Logistics Management, U.S. Department of State.

I gather you are not taking your seats because you know you aretaking the oath. But it is the practice of this committee to swearin all witnesses.

[Witnesses sworn.]Chairman WAXMAN. The record will indicate that each of the wit-

nesses answered in the affirmative.Your prepared statements will be in the record in full. We would

like to recognize each of you for an oral statement for 5 minutes,and then after that we will have questions that we will want topursue with you.

Ambassador Satterfield, if we might start with you.


123

STATEMENTS OF AMBASSADOR DAVID M. SATTERFIELD, SEN-IOR ADVISOR TO THE SECRETARY AND COORDINATOR FORIRAQ, U.S. DEPARTMENT OF STATE; AMBASSADOR RICHARDJ. GRIFFIN, ASSISTANT SECRETARY OF STATE, BUREAU OFDIPLOMATIC SECURITY, U.S. DEPARTMENT OF STATE; ANDWILLIAM H. MOSER, DEPUTY ASSISTANT SECRETARY FORLOGISTICS MANAGEMENT, U.S. DEPARTMENT OF STATE

STATEMENT OF AMBASSADOR DAVID M. SATTERFIELD

Ambassador SATTERFIELD. Thank you, Chairman Waxman,Ranking Member Davis, members of the committee. Thank you forinviting me here today and for the opportunity to speak to the vitalsecurity that private security firms provide to our State Depart-ment personnel.

In Iraq, as in Jerusalem, Gaza and the West Bank, I have beenprotected by Blackwater and other private security details. As youknow, Mr. Chairman, I was the Deputy Chief of Mission in Bagh-dad from the spring of 2005 until late summer of 2006. I witnessedfirst-hand what Ambassador Crocker has rightly described as thecapability and courage of our protective details, as have manyMembers of Congress, including some, Mr. Chairman, on this com-mittee.

The contracting of security personnel for State Department offi-cials is neither new nor unique to Iraq. For example, we have em-ployed private protective security details, PSDs, in Haiti, Afghani-stan, Bosnia, as well as Jerusalem, Gaza and the West Bank. Wedo not bunker down in dangerous environments. But we do need,and we do take prudent precautions to protect the safety and wel-fare of our personnel.

Iraq is a dangerous place. Yet I think we can all agree that ourdiplomats and civilian personnel need to be able to operate along-side our military colleagues and to have the broadest possible free-dom of movement throughout that country. We must be able tointeract with our Iraqi counterparts and with the Iraqi population.Without protective security details, we would not be able to havethe interaction with Iraqi government officials, institutions andother Iraqi citizens critical to our mission there.

The State Department uses multiple security specialists in Iraq.Furthermore, it should be noted that the Department of State isnot the sole client of these security companies. The U.S. military,Iraqi government officials, private Iraqi citizens, independent insti-tutions and non-governmental organizations as well as journalistsall use private security firms, of which Blackwater is one of many.A black Suburban does not equal Blackwater.

Insofar as the State Department’s security contractors in Iraqare concerned, we demand high standards and professionalism.Those standards include relevant prior experience, strict vetting,specified pre-deployment training and in-country supervision andoversight. As you know, many of the individuals serving are veter-ans who have performed honorably in America’s armed forces.

All Embassy Baghdad security contracts fall under the oversightof the regional security office. Those contracts require high stand-ards, covering areas ranging from conduct and demeanor to use offorce to mission operational guidelines. Those standards are writ-


124

ten into the companies’ contracts. These policies, these standardsonly allow for the use of force when absolutely necessary to addressimminent and grave danger against those under their protection,themselves and others.

In those rare instances when security contractors must use force,management officials at the embassy conduct a thorough review ineach and every instance to ensure that proper procedures were infact followed. In addition, we are in constant and regular contactwith our Iraqi counterparts about such instances. And the incidentof September 16th was no exception.

I want to underscore, Mr. Chairman, the seriousness with whichSecretary Rice and the Department of State view both the eventsof September 16th and the overall operations of private securitycontractors working for the Department of State in Iraq. At the di-rection of the Secretary, we are conducting three different reviews.As I stated before, the embassy conducts regular reviews of everysecurity incident. We are conducting a thorough investigation intoand review of the facts surrounding the events of September 16th.

At the request of the Department of State, the Federal Bureauof Investigation is sending a team to Iraq to assist on the ongoinginvestigation into that incident allegedly involving Blackwater em-ployees. The Secretary of State has made clear that she wishes tohave a probing, comprehensive, unvarnished examination of theoverall issue of security contractors working for her Department inIraq. And so we are working on two different fronts, Mr. Chairman.Following direct communication between Secretary Rice and PrimeMinister Malaki, our embassy in Baghdad and the Prime Minister’soffice have established a joint government of Iraq and U.S. Govern-ment commission to examine issues of security and safety relatedto U.S. Government-affiliated protective security detail operations.

This will also include review of the effect of CPA Order 17 onsuch operations. This joint commission will make policy rec-ommendations for resolving any problems it may uncover. Finally,the Secretary has directed Ambassador Patrick Kennedy, a verysenior and extremely capable Department management officer, tocarry out a full and complete review of security practices for ourdiplomats in Iraq. His review will address the question of how weare providing security to our employees. It will take into accountall aspects of this protection, including the rules of engagement andunder what jurisdiction they should be covered. Ambassador Ken-nedy is now in Baghdad with some of his team.

In addition to Ambassador Kennedy, his team will ultimately in-clude General George Joulwan, Ambassador Stapleton Roy andAmbassador Eric Boswell, outsiders who will bring with them cleareyes and an independent view of what needs to be done. This is anextraordinarily well-qualified team and it has experience directlyrelevant to this review.

We are fully committed to working with both our security spe-cialists and the Iraqi government to ensure the safety of U.S. Gov-ernment personnel. Both are and will be essential to our success.

With that, Mr. Chairman, Assistant Secretary Griffin, DeputyAssistant Secretary Moser and I are happy to take your questions.

[The prepared statement of Ambassador Satterfield follows:]


125


126


127

Chairman WAXMAN. Neither of you two have opening state-ments? You are just here to answer questions, is that correct?Thank you.

Mr. Ambassador, when Mr. Prince was testifying here earliertoday, we asked him about that very disturbing incident on Christ-mas Eve, 2006. The basic facts of the incident are that aBlackwater contractor shot and killed an Iraqi security guardworking for the Iraqi vice president. According to the documentsthe committee received, Blackwater transported the shooter out ofIraq within 36 hours of the killing, and it did so with the approvalof the Baghdad embassy’s regional security officer.

Why did the State Department facilitate the departure of theBlackwater contractor suspected of murdering one of the Iraqi vicepresident’s security guards?

Ambassador GRIFFIN. As you know, the incident that you de-scribed is presently in the Department of Justice for a prosecutivereview. I think that to pre-judge exactly what occurred thatevening as far as the facts of the case go would be inappropriatefor me at this time.

[The prepared statement of Ambassador Griffin follows:]


128


129


130


131


132


133


134


135


136


137

Chairman WAXMAN. I am not asking about the facts of the case.I am asking you about the State Department’s response. Why didthe State Department respond in this way?

Ambassador GRIFFIN. At the time of the incident, after a numberof interviews were conducted, there was no reason for him to stayin Baghdad.

Chairman WAXMAN. Well, the committee had a briefing from Am-bassador Kennedy last week, and he stated that the subjects of in-vestigation should be kept in-country, because the investigatorsmay need access to them. In fact, when you think about this, thisis an obvious point. Why didn’t you follow the policy recommendedby Ambassador Kennedy?

Ambassador GRIFFIN. You can’t describe how a case should behandled universally. Each case has to be judged on its own merits.And Ambassador Kennedy may have had some other notion aboutthe proper way to proceed.

Chairman WAXMAN. Well, this is not an ordinary case. This is apretty extreme one. You have a private military contractor withinthe Green Zone, which is an internationally protected area, shootand kill an Iraqi security guard. What we saw was that within 36hours, he was ushered out of the country and the State Depart-ment helped that happen. In fact, the documents show that the pri-mary response of the State Department was to ask Blackwater tomake a payment to the family in the hope that this would makethe problem go away. There is even a discussion among State De-partment officials about how large the payment should be. One offi-cial suggested $250,000, but this was reduced instead to just$15,000.

Yesterday during the State Department’s daily press briefing, theagency’s spokesman said, ‘‘We are scrupulous in terms of oversightand scrutiny not only of Blackwater, but all of our contractors. Iwould strongly dispute anyone’s assertion that the State Depart-ment does not exercise good and strong oversight in our efforts tomanage these contractors.’’ That was the statement made yester-day.

When I look at the State Department response to the ChristmasEve shooting, I don’t see scrupulous oversight and scrutiny. I seean effort to sweep the whole incident under the rug. How wouldyou respond to that?

Ambassador GRIFFIN. I would say that the area of what laws areavailable for prosecution is very murky. I believe it is somethingthat the executive and legislative branches have been working onto try and clarify. And I think that lack of clarity is part of theproblem.

Chairman WAXMAN. So you weren’t sure at the State Depart-ment whether this was a possible criminal violation, when a personhired by a contractor of the United States shoots and kills an Iraqiin the Green Zone? There is a question of whether this is criminal?Is that why the State Department helped get him out of the coun-try and gave Blackwater a suggestion of how much to pay to getrid of the whole incident?

Ambassador GRIFFIN. That is your judgment that is what hap-pened. I was not there. I think that is why the Department of Jus-


138

tice is examining this case. And they are examining the potentialways that it might be prosecuted.

Chairman WAXMAN. Well, it just seems to me common sense tosay that if there is an examination going on, and the man is notthere any longer, you can’t pursue some of those issues. And theones that pursue the investigation are the ones right there on theground. You don’t get the guy out of the country as fast as possibleand then say we did what we thought was a responsible thing todo. Even the deputy director of the trade association representingprivate security contractors sees a problem. He told the Washing-ton Post, ‘‘Blackwater has a client who will support them no matterwhat they do.’’

As I view the record, it shows that the State Department is act-ing as an enabler to Blackwater tactics. The company acts as ifthey are untouchable for a simple reason: the State Department de-mands no accountability. They are not accountable to the military.They are not accountable to the Iraqi criminal system. And theState Department, who is the contractor, seems to have acted likethey are helping Blackwater get rid of the guy so that the wholeincident can go away.

Ambassador GRIFFIN. The incident was referred to the Depart-ment of Justice of our country for their prosecutive decision andfollowup. They are the prosecutors. The State Department isn’t theprosecutive department for the U.S. Government.

Chairman WAXMAN. Have the State Department people beenasked any questions by the Department of Justice about this issue?

Ambassador GRIFFIN. I am sure there has been conversation, butI can’t——

Chairman WAXMAN. You should, but you don’t know?Ambassador GRIFFIN. No, I can’t name when and where.Chairman WAXMAN. The fact of the matter is, it seems strange

that if there is this kind of situation, there hasn’t been any actionby the Justice Department to date. This is almost, well, not quitea year, but this is the fall, nine, 10 months later. I wonder whatreally is going on.

Mr. Davis.Mr. DAVIS OF VIRGINIA. Thank you. My good friend here said

that this was unprecedented in terms of the amount of securitygoing on over there, private security. I just wonder, Mr. Satterfield,my understanding is the State Department has been contractingfor security services at diplomatic posts throughout the world fordecades. Is this unprecedented?

Ambassador SATTERFIELD. The scale of the operation in Iraq isunprecedented. But the fact of contracting, both through directhire, and by use of private security contractors, such asBlackwater, DynCorp, Triple Canopy and others, is certainly notunprecedented. It is practiced at a number of posts in a number ofcountries around the world.

Mr. DAVIS OF VIRGINIA. If you could go back 4 years, would youhave taken this in-house or would you stick to what we are doingat this point in terms of contracting out?

Ambassador GRIFFIN. At the time that the decision was made touse contractors, it was made because there was an immediate needto provide security for U.S. Government employees working in a


139

hostile environment, trying to assist the Iraqi people in standingup various civilian agencies. Everyone knows that the military wasdoing their function there. We were trying to stand up the civilianside of the government, which was pretty much in shambles at thattime.

In order to fulfill that security mission, in order to be able to im-mediately deploy people in the near-term, contractors were used.The fact is, if we were to attempt to recruit and train diplomaticsecurity agents for that mission, it would take anywhere from 18months to 2 years to identify them, do all the backgrounds, do theclearance work, 7 months of basic training, follow-on training forhigh threat parts of the world.

Mr. DAVIS OF VIRGINIA. Also, when the mission winds down,what do you do with them at that point, too?

Ambassador GRIFFIN. When the mission ends, you may havemore people than you have work for.

There are also specialists that are employed by the contractors,people who have training in, helicopter pilots, people who are me-chanics for armored vehicles, people who are armorers, people whoare medical technicians, etc., that are all part of the requirementthat you have when you are working in a combat zone. So for amultitude of reasons, it made good sense to deploy people with theexpertise that is needed but for what was expected to be a shortto medium term duration.

Mr. DAVIS OF VIRGINIA. But it has been a longer term duration,hasn’t it?

Ambassador GRIFFIN. It has been. But the fact is, we have usedcontractors going back to 1994 for this protective security mission,when they were first used in Haiti. So those previous contracts,some have come and gone, so it does demonstrate that this is nota career-type assignment for somebody.

Mr. DAVIS OF VIRGINIA. Is it cheaper to go outside, or would itbe cheaper to take them inside and basically start a bureaucracywithin the Government to handle these kinds of things?

Ambassador GRIFFIN. Mr. Moser can speak to all the contractcosts, but when you are looking at the cost of whether it is a con-tractor or a person in the military or a person in the State Depart-ment, you have to look at what we call the fully loaded costs, whichincludes all of the expenses, which you are all very well aware offrom your dealing with the budget for all these years. The fact isthat the costs for a State Department special agent to be deployedin a high threat area approaches $500,000.

Mr. DAVIS OF VIRGINIA. Mr. Moser, do you want to comment?Mr. MOSER. Well, I will add one thing to that. We actually do

cost analyses in the acquisition activity. And I am very proud ofthe cost analysis they do, because particularly, if we have a situa-tion, our first contract to Blackwater was awarded in 2004. We didnot have competition, so we had to actually do extensive analysisat that time to make sure that the costs were reasonable.

But to add to what Ambassador Griffin has said, I used to workin an office called Global Support Services and Innovation. Wespent many, many months discussing how much it actually coststo position an American overseas, an American diplomat like me,or a DS agent. And their prices range from around $400,000 for a


140

regular mission around the world to around $1 million for anAmerican diplomat positioned in Iraq.

So when we talk about using contract employees, I think that wehave to be very careful to consider what the fully loaded costswould be of direct hires, and as you have already pointed out verywisely, Congressman Davis, you do have to think about, do youreally need these people for a long term.

Mr. DAVIS OF VIRGINIA. So basically, when we start comparingcosts, I think earlier someone used the analogy of a sergeant being$60,000 to $80,000 a year, and a contract employee being $400,000a year, those aren’t fully loaded costs and it is not apples to apples.Would that be your opinion?

Mr. MOSER. Well, I look at it this way. We have lots of employeesin Iraq and the missions around the world. Well, I actually, alsoone of my duties is to run the transportation part of the State De-partment. And that is where we move people’s household effectsaround the world. That activity alone is around $220 million ayear. That does not appear in that employee’s salary cost, that issomething that we do for each employee.

Mr. DAVIS OF VIRGINIA. So if you divided the number of employ-ees by the $220 million, you would get a high number?

Mr. MOSER. That is right, and you can keep on adding thesecosts. And as I said, in my previous assignment, we looked at this.How do you amortize the building costs for over the years, likewhat the rental price is?

Mr. DAVIS OF VIRGINIA. One of the things that Mr. Waxman andmyself and the committee ultimately want to understand is reallywhat are the costs. I don’t know if we can get GAO to look at that,or how we compare apples to apples in an objective way. Becauseeverybody has their own numbers on this. And that is somethingthat would be helpful to you, I would think, as well.

Mr. MOSER. It is very helpful to me. And I will say that over theyears, I have actually discussed this topic with a number of em-ployees at GAO. Because it is not an old topic, by any means.

Chairman WAXMAN. Thank you, Mr. Davis.Mr. Tierney.Mr. TIERNEY. Thank you, Mr. Chairman.Mr. Moser, can you tell us whether or not the number of diplo-

matic security service agents has been reduced at the State Depart-ment since 2001?

Mr. MOSER. I think Ambassador Griffin is going to need to an-swer that question.

Mr. TIERNEY. Ambassador, can you answer that question?Ambassador GRIFFIN. Current staffing is about 1,450, and it does

reflect an increase over the past 4 to 5 years. I have been on board2 years, and I know one of those years we brought on 175 addi-tional agents, and there were some brought on the year before. ButI could certainly give you the specifics for the record if you wouldlike to have that.

Mr. TIERNEY. Were any of those additional agents brought inwith respect to Iraq, or were they other places around the world?

Ambassador GRIFFIN. They are for various places around theworld. We have at the present time approximately 36 of our agentsin Iraq.


141

Mr. TIERNEY. Now, I think we can all agree that Baghdad is notjust any other embassy right now, it is the largest post and it isin a war zone. There are about 800 personnel, I think you said ear-lier, or told the committee earlier, that are involved in the privatesecurity detail to protect embassy personnel in Iraq, would that beaccurate?

Ambassador GRIFFIN. There are 845 Blackwater personnel inBaghdad and Al-Hillah, and the other two contractors have addi-tional resources. So it is about 1,150 total.

Mr. TIERNEY. Are there any other embassies around the worldwhere the security details are that large?

Ambassador GRIFFIN. I don’t believe so.Mr. TIERNEY. Now, just looking at some of the statistics here, we

have reports that say Blackwater engaged in shooting incidents on195 occasions in less than 3 years. That is about 1.4 times perweek. Are there any other embassies around the world in whichthe security details have been engaged in that many shootings inthe last 3 years?

Ambassador GRIFFIN. I would say that the environment in Iraqis unique and that we are operating in a combat zone.

Mr. TIERNEY. So is that a no?Ambassador GRIFFIN. As to whether anyone else has the same

level of——Mr. TIERNEY. As to whether there is any other embassy around

the world where the security details have engaged in that manyshootings in the last 3 years?

Ambassador GRIFFIN. Not that I can think of.Mr. TIERNEY. And when we look at the Blackwater reports, we

also show that Blackwater has caused at least 16 casualties andsignificant property damage from fired weapons on over 160 occa-sions in the last 3 years. Are there any other embassies around theworld in which security details have caused that many casualtiesor that much property damage in the same period of time?

Ambassador GRIFFIN. No, but there are no other embassies likeBaghdad.

Mr. TIERNEY. Well, I think we established that in my first ques-tion. I was fully in agreement with you that it was a unique situa-tion.

Ambassador GRIFFIN. Thank you.Mr. TIERNEY. So I think Blackwater thinks that all the shootings

were justified, and I think that raises another question. You toldus that there is a special use of force policy specific to the embassyin Baghdad and that special policy would allow security forces todo things that ordinarily they might not be able to do, such asshooting at cars that get close to the motorcades.

Are there in fact special rules on the use of force that permit thattype of shooting in Baghdad?

Ambassador GRIFFIN. Yes, there are.Mr. TIERNEY. OK. And is there any other place, other than per-

haps Afghanistan, is there any other place where those specialrules are in effect?

Ambassador GRIFFIN. I can’t say, as I sit here. Each post in theState Department operates under a chief of missions firearm policy.In most of our posts, they are fairly similar. All of our agents oper-


142

ate under the normal DOJ guidance for Federal law enforcementpersonnel for deadly use of force.

Mr. TIERNEY. I guess my point on the special rules that apply toIraq is that when you have those special rules and the need forthose special rules, are you going to be able to shoot at cars thatget within a particular distance of a motorcade because you areconcerned about an IED attack? That happens over 160 times in3 years? It appears to me that this might not be a mission for civil-ian law enforcement agents, like the diplomatic security or the con-tractors. It in fact might be a mission for the U.S. armed forces.

So the real question we are trying to get at here as a committeeis, whether or not the diplomatic security has enough agents maybe beside the point, the question may be whether or not this isn’ta case where 800 troops or 845 troops actually should be takingover that mission. And if we are fighting a war and we have twodifferent departments, State Department and the Defense Depart-ment, maybe they ought to get together and try to figure out whenand how they are going to perform that responsibility.

Let me just, in the time left to me, the brief time, just ask aquick question here. On February 4, 2007, the Iraqi government al-leged that on that day, Blackwater shot and killed Iraqi journalistHana al-Ameedi near the Iraqi Foreign Ministry. Is that true?

Ambassador GRIFFIN. I am aware that there were a number ofallegations made about shootings in the newspaper. If I may, Iwould like to describe what happens when one of our PSD teamsis involved in a shooting incident, so we can have a clear under-standing of how the procedures work.

Mr. TIERNEY. Could I ask you, in the course of doing that, if thechairman is going to allow us to get into this, my way of approach-ing that, if you would be good enough to work with me on that is,let us know which of the incidents the State Department has actu-ally investigated, and then tell us whether or not you can provideus with copies of that investigation and then after you have donethat, we will be happy to hear the way that you go about doing it.

Ambassador GRIFFIN. We will provide you copies of every inves-tigation that has been done.

The standard procedure is, when one of our protective securitydetails is on a mission and a weapon is fired, as soon as they getback to the international zone, the team that was involved in thatincident comes to the tactical operations center which is the hubfor DS operations. Members of the team are segregated, they areinterviewed by DS agents to report what had happened.

Within 24 hours they have to provide a written, sworn statementas to what happened. The statements are reviewed to make surethat the statements are consistent as to what occurred. They arereviewed by management at the post and on a parallel track, ona weekly basis, our people who manage our overseas protective op-erations have weekly meetings with our contractors. So at the sametime, they are also exchanging information about any incident thatmight have occurred during the course of that week.

Chairman WAXMAN. Thank you, Mr. Tierney.Mr. Burton.Mr. BURTON. Thank you, Mr. Chairman.


143

I will probably ask you some questions that we asked of the CEOof Blackwater, because I would like to get a perspective of thatfrom the State Department.

First of all, would it be more effective if we used active Armypersonnel to provide these services? Would it be more cost effectiveor generally more effective?

Ambassador GRIFFIN. I think that the professional men andwomen in the armed forces could do this mission, provided thatthey were given the training that the professional security special-ists have. It is not the normal military training that they receiveto go out and fight a war. When you are in a professional securitymission where your mission is to protect the person who is yourprincipal and you come under fire, your response is not to stay andfight, your response is to get off the X.

Mr. BURTON. So the mission is more defensive than offensive?Ambassador GRIFFIN. That is right.Mr. BURTON. Several times it has been suggested that the De-

partment’s contract with Blackwater and other firms was solesource, a sole source contract. Was it awarded improperly or not?

Mr. MOSER. I think I need to take that question, Mr. Burton.In 2004, as the U.S. Government made the transition from the

Coalition Provisional Authority to a U.S. embassy presence, we de-cided to do a sole source contract for Blackwater to provide the per-sonal security services that Blackwater provides. That was the onlytime that this contract has been sole sourced in the Department ofState. The reason we did that was for urgent, compelling reasons,and essentially, there was a fully signed document by the properofficials within the State Department that signed that justification.

We were under a very, very urgent situation to make that transi-tion. We had to make an effective transition and provide the secu-rity services, so that the embassy could get up and running.

That document for urgent and compelling reasons was signed bythe procurement executive of the State Department, by the Depart-ment’s legal counsel for acquisition, and by all the necessary offi-cials in both diplomatic security and in the acquisition activity. Wedid not like doing a sole source award to Blackwater, and therefore,at the close of 2004, we asked our OIG to get an audit of their priceproposal. And Mr. Waxman actually put the results of that auditin his letter of yesterday. We were very glad to see that there, be-cause that was an audit that the acquisition activity asked for.

The reason we asked for it is that sometimes we need an outsideaudit to come in and take a look at a contractor to see if the ratesare correct. And the actual results of that audit, we were able totake part of the Blackwater contract costs, which were, Blackwaterproposed around $140 million, and negotiate those down to $106million. So we think that the audit was a very positive thing.

Then the next year, in 2005, this contract was incorporated intothe World-wide Protective Services Contract, and it was competi-tively bid and awarded.

Mr. BURTON. That was a very thorough answer.In the opinion of the State Department, are the contractors out

of control, or are any of them untrained?Mr. MOSER. Well, I know that by the terms of the contract, they

are very well trained. I will defer to my colleagues in diplomatic


144

security to answer the question about out of control. I am, as partof the contracting activity, I would not make that judgment. Butthat is where we would rely on the advice of the programmatic peo-ple.

Mr. BURTON. Would one of you Ambassadors like to comment?Ambassador GRIFFIN. Please, if I may, Mr. Burton. All of the

WPPS contractors who are employed under the terms of that con-tract must have at least 1 year of prior military experience, priorlaw enforcement experiences. Very often the military experience isspecial forces, the law enforcement experience is SWAT-type expe-rience.

Upon being identified they have to successfully undergo a back-ground check. They have to qualify for a secret clearance from ourGovernment. And they also have to go through a training course,which has been prescribed by DS, of 164 hours in order to givethem specific training on the mission that they will be tasked todo when they arrive in-country.

Mr. BURTON. I see my time has expired. I had some more ques-tions, Mr. Chairman. Are we going to have a second round?

Chairman WAXMAN. I wasn’t planning on it. How many more doyou have?

Mr. BURTON. Just one or two more.Chairman WAXMAN. Why don’t you see if you can do the one or

two more?Mr. BURTON. Thank you, Mr. Chairman. I appreciate that.Chairman WAXMAN. We will give you another minute.Mr. BURTON. When your contractors fire first at a vehicle speed-

ing toward a chief of mission motorcade, is that a violation of thecontract rules of engagement?

Ambassador GRIFFIN. Absolutely not.Mr. BURTON. Tell me from your perspective what takes place,

what should take place? That will be my last question.Ambassador GRIFFIN. The use of force policy, which is prescribed

in the chief of mission policy in Baghdad and our standard proce-dures for our high threat protection division, one does not have towait until the protectee or co-worker is physically harmed beforetaking action.

We have an escalation of force policy in order to try and take anumber of steps, prior to having to go to the use of the firearmsthat our people carry. On the back of all our motorcade vehicles inArabic and English there is a warning to stay back 100 meters.These vehicles are operating with lights and sirens. If a vehicle ap-proaches from the rear when everyone else has stopped or goesaround stopped vehicles and appears to be approaching our convoy,hand signals will be given, verbal commands will be given in orderto get the attention of that driver, in order to get them to stop. Ifthey still haven’t gotten their attention, they will shoot a flare atthe vehicle, which also will get their attention but it won’t hurtanybody. They will use a bright light to shine at the vehicle. If thevehicle is still coming, they may even throw a bottle of water atthe vehicle.

Having all of those steps failed, they will put a round in the radi-ator of the vehicle or a couple of rounds to try and stop the vehicle.If the vehicle continues to come, realizing the number of BB/IED


145

attacks that occur in this environment, they are then authorized,for their safety and the safety of the people they are protecting, toshoot into the windshield in order to stop that vehicle.

Chairman WAXMAN. Thank you, Mr. Burton.Ambassador GRIFFIN. It is the escalation of force policy, as we

call it.Mr. BURTON. Thank you, Mr. Chairman.Chairman WAXMAN. Ms. Watson.Ms. WATSON. Thank you, Mr. Chairman.The panel has spoken about how important private security con-

tractors are for the State Department and how good they are attheir jobs. Ambassador Griffin, in your prepared testimony, you re-ferred to private contractors as a skilled cadre of security profes-sionals. And Ambassador Satterfield, you mentioned that you de-mand high standards and professionalism from these contractors.

In general, do you feel that private security companies do a goodjob in carrying out their mission of protecting State Departmentpersonnel?

Ambassador SATTERFIELD. Congresswoman, we do believe thatthe overall mission of security contractors in Iraq is performed ex-ceedingly well, with professionalism, with courage. The undertak-ing that the Secretary of State has made is to have a comprehen-sive review of all of those operations, to look at the mission, to lookat the resources brought to the mission, to look at all aspects ofprocedures, rules of engagement, questions of jurisdiction and au-thority, to take a solid look at whether something better can bedone, whether there are issues that need to be addressed. Then weare going to expose that to outsiders for independent review.

Ms. WATSON. Let me just cut you off. Are you doing that reviewfor all security or just for those in the theater in Iraq?

Ambassador SATTERFIELD. For all private security contractors op-erating in Iraq.

Ms. WATSON. OK. Now, you know I have been an ambassador.I probably am the only one in Congress at the time, in the House,that has been there. And I would insist that you do that. BecauseI had an incident with a private contractor at my post where hewould knock trainees down and then kick them with the point ofhis boot. I would have fired him, but the word back from the StateDepartment was that there was no one else to hire. So I wouldhope that would be broad-based, the investigation, and not justthere.

One of the major reasons this committee has expressed someskepticism about the use of Blackwater and other private securitycontractors is because of the great respect we have for all the menand women who wear the uniform in Iraq. And we trust the mili-tary to face our most pressing challenges and stand up to ourgreatest threats. And yet for all your statements about the skilland professionalism of these private contractors, and I am a wit-ness, if you want to come and talk to me privately, I will tell youabout my experiences with these private contractors.

So many in the military have been very critical of private secu-rity contractors in Iraq, and especially Blackwater. Brigadier Gen-eral Karl Horst said, ‘‘These guys run loose in this country and dostupid stuff.’’ ‘‘There is not authority over them.’’ I was the author-


146

ity over my security team when I was the Ambassador, and I rep-rimanded them for how they treated their trainees. ‘‘So there is notauthority over them so you can come down on them when they es-calate force. They shoot people and someone else has to deal withthe aftermath. It happens all over the place.’’

An Army lieutenant colonel serving in Iraq said of Blackwater,‘‘They are immature shooters and have very quick trigger fingers.Their tendency is to shoot first and ask questions later. We are allcarrying their black eyes.’’

A senior U.S. commander serving in Iraq said, ‘‘Many of mypeers think Blackwater is oftentimes out of control. They often actlike cowboys over here.’’ Another U.S. military commander put itbluntly: ‘‘Iraqis hate them. The troops don’t particular care forthem, and they tend to have a know-it-all attitude, which meansthey rarely listen to anyone, even folks that patrol the grounds ona daily basis.’’

And I can go on and on. But I would like you to address how wecan, if you will, be sure that our military has the training, you, theState Department contract, and you go to private firms. If you seeareas of our training that are missing, would you make that rec-ommendation to the Department of Defense?

Ambassador SATTERFIELD. Madam Congresswoman, there aredifferent missions in Iraq today. Certainly, the ones you raise areones that can be considered by the Department of Defense and bythe Joint Chiefs in terms of the mission to be assigned to U.S.forces, whether in Iraq or elsewhere. I really can’t speak to that.

What I can speak to is the oversight and accountability whichthe Department of State has and must exercise over those privatesecurity contractors that work for us today in Iraq. That is a re-sponsibility we take quite seriously. It is a responsibility that wewill be carrying out in terms of this overall review in a very com-prehensive fashion and we will make the results of that available.

Ms. WATSON. OK, my time is up, and there is a call to go to thefloor. But I would just like to say in closing as I run out the door,I think somebody from the State Department ought to come andtalk to me.

Chairman WAXMAN. Thank you, Ms. Watson.Ambassador GRIFFIN. We will get on your schedule at your earli-

est convenience, and we look forward to talking to you.Chairman WAXMAN. Mr. Shays.Mr. SHAYS. Thank you.Gentlemen, would you agree that there is a huge difference be-

tween an ambassador in a country where there is not a threat totheir lives and the challenge that Ambassador would have with acontracting team that is to protect them and one in places like Jor-dan and other areas in the Middle East and particularly Iraq? Isthere not a big difference? In other words, don’t you have a lotmore contractors having to secure people in a nplace like Iraq ver-sus what an Ambassador would have to protect his or her well-being?

Ambassador SATTERFIELD. Some of the personnel that we haveunder contract——

Mr. SHAYS. I want you to move the mic closer, please.Ambassador SATTERFIELD. I am sorry?


147

Mr. SHAYS. Move the mic closer to you, please.Ambassador SATTERFIELD. Some of the people at our posts

around the world are part of our local guard force. And those localguards——

Mr. SHAYS. You are not answering the question. I asked is therea difference.

Ambassador SATTERFIELD. There is a huge difference betweenBaghdad——

Mr. SHAYS. Thank you, there is a huge difference.Ambassador SATTERFIELD. My point is there are guards——Mr. SHAYS. Case closed. Let me take the next question. I only

have 5 minutes. It’s an easy answer. There is a big difference. Themen and women who are being defended in Iraq by security people,their lives are in danger every day. Now, Mr. Satterfield, isn’t ittrue the Ambassador has responsibility in Iraq for those securitypersonnel?

Mr. MOSER. Indeed he does, Congressman.Mr. SHAYS. Thank you. And does he exercise it?Mr. MOSER. Yes, he does.Mr. SHAYS. Thank you. Would you tell me, Mr. Satterfield, can

you describe the process that is followed by the Department—ex-cuse me. Let me ask this question. If there were sufficient, I wouldlike to know if there were sufficient military personnel to providearmed escorts for convoys in Baghdad and conduct protection,would you still use contractors to provide such security?

Ambassador GRIFFIN. As I mentioned a minute ago, Mr. Shays,if the outstanding young men and women of the military receivedtraining in protective security operations, then they certainlywould be capable of performing——

Mr. SHAYS. That is not what I asked. I want to know if you havea preference for using—and I am sorry, these are basically simplequestions. I want to know if your choices between people, outsidecontractors, or would you like to use the resources of the militaryto have to spend their time to protect State Department employees.Do you want State Department employees to go around inHumVees with lots of armored personnel, or would you prefer thatthey go around the way they do in civilian clothes with people whoare securing them that aren’t in Army uniforms?

If you prefer the Army, tell me to do it.Ambassador GRIFFIN. All I was saying is the Army would be ca-

pable of doing it if it was done in the manner which we prescribed,which would not be HumVees, they would not be in uniforms. Theprotective security personnel that we utilize are trained for thatspecific mission.

Mr. SHAYS. If they were Army personnel, would they be underyour command and oversight? Or would they be under the com-mand of the Army?

Ambassador GRIFFIN. If they were performing a protective mis-sion of the Ambassador and other——

Mr. SHAYS. Do you command the Army or does the Army com-mand the Army?

Ambassador GRIFFIN. The Army command the Army.Mr. SHAYS. So the answer is, isn’t it, that they would be under

the command of the Army and not under your jurisdiction and


148

oversight if they were in fact Army? I don’t want to put words inyour mouth?

Ambassador GRIFFIN. No, no. Well, I guess they would be.Mr. SHAYS. I am just asking the question. Yes, sir.Let me ask you this. Would it be a problem if in fact you had

no responsibility and they were to be answerable to the Army?Generals and so on.

Ambassador GRIFFIN. I think that is a national policy consider-ation, as to the staffing levels of the Army to perform that mission.

Mr. SHAYS. Well, as a Peace Corps volunteer, and I will justmake this point, the last thing you want when you are going intothe community is to come in with a military force. What you wantis to have a low profile. You want a protocol that says you don’tbring in tanks, you don’t bring in HumVees, you bring in a civiliancar, you want people dressed in civilian clothes for the most part,not dressed in Army uniform.

Let me ask you in closing, Mr. Satterfield, when Mr. Bremerwent into places, wasn’t one of the criticisms that he was going inwith the Army, with a high profile of military personnel and hav-ing an Army footprint instead of having a civilian footprint?

Ambassador SATTERFIELD. Congressman, around the world,whether it is at a critical threat post or a different threat levelpost, we try to make our protective details, our presence, as lowprofile as possible consistent with the protect mission, as unobtru-sive as possible, and as consistent with the civilian setting in whichwe operate as possible.

Mr. SHAYS. Thank you.Chairman WAXMAN. The gentleman’s time has expired.Mr. Cooper.Mr. COOPER. Thank you, Mr. Chairman.I took my 88 year old mother to the movies the other day. We

saw a movie called No End In Sight. It is really more of a docu-mentary than a movie. In the middle of it, they say that the follow-ing footage was filmed by a U.S. security contractor, and he or sheset the film footage to their own music. So it sounds like MTV,driving rock music. But the video footage is truly startling. It isshooting up cars, apparently on a street in Baghdad, killing civil-ians, to this driving rock music.

Is the State Department aware of this film or have you made in-quiries as to which contractor, employee or independent contractorshot this footage?

Ambassador GRIFFIN. No, I am not familiar with the footage.Mr. COOPER. And you are not familiar with the fact that it is

being shown all over America?Ambassador GRIFFIN. I am not familiar with the footage.Mr. COOPER. Ambassador Satterfield, same answer?Ambassador SATTERFIELD. I am aware of that footage. It is out-

rageous. The U.S. Government responded in just that fashion atthe time it was initially circulated, I believe that was some yearsago. It may be featured in a movie today, but the film footage isnot new. It does not reflect in any way the standards of conductthat are prescribed by our regional security office on the operationof any private security contractor operating in Iraq, not today andnot then.


149

Mr. COOPER. So you have not seen it, but you know it is nottrue?

Ambassador GRIFFIN. I have seen that footage.Mr. COOPER. Mr. Ambassador, you say in your testimony, in

those rare instances when security contractors must use force,management officials at the embassy conduct a thorough review toensure that proper procedures were followed. AmbassadorNegroponte has tried something similar just days ago. The commit-tee tried to find out about an incident that happened on November28, 2005. That is when a Blackwater convoy deliberately smashedinto 18 different cars en route to and from the Ministry of Oil.Blackwater’s own internal memo on the incident said thatBlackwater’s tactical commander on that mission ‘‘gave clear direc-tion to the primary driver to conduct these acts of random neg-ligence for no apparent reason.’’

We have the Blackwater memo right here, the Blackwater avia-tion team that was accompanying convoy pointed out the problems.It also says that when Blackwater officials responsible were ques-tioned about this incident, they gave statements, official state-ments, that your own employees said were ‘‘deemed to be invalid,inaccurate and at best dishonest reporting.’’

So we have a problem here, and the State Department inves-tigates problems. Well, when the committee asked the State De-partment about this incident, we got no response. So we don’t knowwhether that means you investigated it and won’t tell us, or youdidn’t investigate it. Which is it?

Ambassador GRIFFIN. There were a number of incidents that thecommittee requested reports on 6 days ago. I regret that we wereunable to pull all those reports together in time for the hearing. Wewill certainly provide those reports for the record.

Mr. COOPER. We requested this in March of this year. So it hasbeen more like 6 months than 6 days. Are you saying thatBlackwater’s recordkeeping is better than yours?

Ambassador GRIFFIN. No, I am saying that there were a numberof other requests made 6 days ago, and I don’t have instant recallof all of them. But we will certainly get a report to you about thisparticular incident.

Mr. COOPER. Another question. Blackwater testified they hiredaway a number of military personnel. And Secretary Gates is evenworried about that, and has talked about non-compete agreements.How many diplomatic security folks have they hired away?

Ambassador GRIFFIN. I am not aware that they have hired any.Mr. COOPER. Do you take that as an insult, they don’t covet your

employees?Ambassador GRIFFIN. No.Mr. COOPER. Do you take it as an insult that we have to have

extra help in so many places around the world, including Haiti?Are you not training your folks up to that level?

Ambassador GRIFFIN. I take it as an indicator of the environmentthat we are operating in a number of posts around the world.

Mr. COOPER. Have you requested the money or the training orthe resources to train your people up to the level that we needthem in Jerusalem and Port Au Prince and Kabul and Baghdadand Basra and lots of places around the world?


150

Ambassador GRIFFIN. My people have the training necessary towork in those areas, and they are working there. But we don’t havethe numbers of people that it would take to fully staff all of thoseoperations, and we don’t have all of the various areas of expertise,as I mentioned, such as helicopter pilots and medics and armorersand mechanics, etc.

Mr. COOPER. Have you asked for the additional resources so thatyou could augment your forces to meet the mission in those areas?

Ambassador GRIFFIN. We have requested additional resources.But again, the question includes whether or not you hire a full-time Government employee who is an employee for 25 or 30 yearswhen the mission might only last 2 years. So certainly there is amiddle ground somewhere.

Mr. COOPER. So the State Department is saying we are exitingfrom Iraq in 2 years?

Ambassador GRIFFIN. No. I am just saying that we have deployedin other places, going back to 1994. And certainly at the beginningof a mission, it is hard to predict exactly how long the operationwill go on. But that we have operated in a number of differentcountries using these protective security specialists.

Chairman WAXMAN. The gentleman’s time has expired.Mr. Issa.Mr. ISSA. Thank you, Mr. Chairman.I am going to continue along that line, because I think it is a

very good line of questioning, and I appreciate this part of thehearing, because I think we are getting to some fundamental ques-tions about, what we are supposed to be Oversight and Govern-ment Reform. And if at the end of this day the oversight doesn’tlead to constructive dialog on reform, then we didn’t do our job.

When we look at nominally 1,000 security people related to theState Department, 800, almost 900 in Iraq, if, hypothetically theyall were standard pays and training that you have somewhere elsein the world, how often would you have to be rotating these peoplein? This is assuming that every one of those 900 or so positionswere standard security within the State Department security appa-ratus. What would that do to your rotating into Iraq? How oftenwould these people be going to Iraq?

Ambassador GRIFFIN. Presently, the rotation is 1 year.Mr. ISSA. No, no, that is not what I am saying. What is the total

number of Government employee RSOs and below that you have atyour disposal worldwide, not including contractors?

Ambassador GRIFFIN. Our total staffing is roughly 1,450.Mr. ISSA. OK. So every year, almost, figuring schooling and re-

tirement, every year you would be rotating half your people in. Youhave 1,400. If we added 1,000, then you would have 2,400 and youwould need 1,000 of them in Afghanistan and Iraq, is that right?

OK, so this is a surge of huge proportion, isn’t that right?Ambassador GRIFFIN. Yes, it is.Mr. ISSA. But let’s go to a couple other areas.Ambassador Satterfield, you and I have known each other for a

few years, because of my travels to Lebanon while you were there.You have been a specialist in the Middle East. When you were Am-bassador in Lebanon, this is an area in which the State Depart-ment contracts itself for its employees, is that correct?


151

Ambassador SATTERFIELD. That is correct.Mr. ISSA. OK. At the time that you were Ambassador in Leb-

anon, what was your amount of career foreign service personnelthat were security, your RSO and so on, versus the contracted per-sonnel that were mostly Lebanese?

Ambassador SATTERFIELD. We had a team of approximately eightRSOs. We had approximately 450 local guards who mainly per-formed static guard duties of mission. We had a team of about 75bodyguards who had a specialty protective rule both at the com-pound and more importantly, outside the compound.

Mr. ISSA. And substantially, that is still what is going on at Em-bassy Beirut?

Ambassador SATTERFIELD. Those ratios have changed, Congress-man, in terms of the number of local guards, the number of body-guards and the number of RSOs. But the ratios in general are simi-lar.

Mr. ISSA. So I am trying to understand, from a standpoint of howyou do business in a situation like Beirut, which since 1983 hasbeen unique, you have refined it. But for all practical purposes,what you do is you use your career State Department people, manyof them at the pinnacle of their training and experience, to overseeessentially 75 mostly national——

Ambassador SATTERFIELD. All national.Mr. ISSA. All national trigger-pullers, to use a term that has been

used here today, and another 450 watchtower people. And that isan efficient way to leverage your U.S. citizens relative to the totalexposure to the U.S. Government at Embassy Beirut.

Ambassador SATTERFIELD. In Beirut, we found it a highly effec-tive way to run the operation.

Mr. ISSA. OK. So this is a model that would not be unreasonableif we knew we were going to be doing the next 20 years in Iraqat this level? Is that true, Ambassador Griffin?

Ambassador GRIFFIN. That is true. And the fact is that if youlook at all of our posts worldwide, we have in excess of 30,000 localguard force employees that secure our embassy and consulate fa-cilities overseas.

Mr. ISSA. OK, so I am going to ask you the question, this is thereform question, again. Do you have or are you working out plansfor areas like Haiti, Bosnia, Afghanistan and Iraq to increase thenumber of direct contract personnel, particularly indigenous, whereappropriate, in order to both increase the domestic participationand reduce the reliance on out of country and comparatively expen-sive contract people?

Ambassador GRIFFIN. I think Mr. Moser can talk about the cyclefor our contracts and the fact that they are of a short term. We arealways looking for ways to improve the way we do business.

Mr. ISSA. I understand that you can terminate Blackwater at theend of a year, any time you want. But I guess the question, becausethis is a committee that should be looking at the long-term costs,and I share with the chairman the fact that we shouldn’t be spend-ing $200,000 forever if we could be spending in some cases a lesseramount and getting as good or better service, whether or not thatis a career foreign service person or an indigenous person takingthe place.


152

Mr. MOSER. Mr. Issa, I have been in the Foreign Service for anumber of years, too, and I have actually been, visited or actuallyserved in a couple of posts in the Middle East. I think my careercolleagues in diplomatic security would agree that our preferenceis to always use local personnel for these services, if it is possibleto do so. It is not in the State Department’s interest to have expa-triate contractors for these kinds of services. It is only somethingwe do in the most extreme circumstances. Just as you pointed out,and in Mr. Satterfield’s experience in Beirut, that is closer to ourtraditional model.

Chairman WAXMAN. Thank you very much, Mr. Issa.Mr. ISSA. Thank you, Mr. Chairman.Chairman WAXMAN. Mr. Lynch.Mr. LYNCH. Thank you, Mr. Chairman. I want to thank the pan-

elists for their testimony.Ambassador Satterfield, in the testimony you prepared for to-

day’s hearing, you wrote: ‘‘In those rare instances when securitycontractors must use force, management officials at the embassyconduct a thorough review to ensure that proper procedures werefollowed.’’ I would like to ask you about the investigation conductedby the State Department, and a couple of incidents we have lookedat. I might only get through one.

During our investigation, we found that on June 25, 2005, aBlackwater operator shot and killed an innocent Iraqi bystander inAl-Hillah. According to State Department e-mail, Blackwater per-sonnel failed to report the shooting, they covered it up, and subse-quently they were removed from Al-Hillah. The State Departmentthen in their e-mail asked Blackwater to pay $5,000 in compensa-tion.

But we have no information showing that the State Departmentever conducted an investigation of that incident in Al-Hillah. Couldyou tell me, was an investigation ever conducted?

Ambassador SATTERFIELD. Congressman, if you will, we will getback to you with full details of that incident and the investigatoryfollowup.

Mr. LYNCH. You are kidding. This is a June 25, 2005 case.Ambassador SATTERFIELD. Congressman, we will respond in de-

tail on the questions you have posed.Mr. LYNCH. But sir, you were the Deputy Chief of Mission at the

time. You don’t recall this?Chairman WAXMAN. Congressman, I do not recall in the fashion

necessary to respond to your question in the detail it deserves.Mr. LYNCH. I am just asking if there was an investigation. That

is not, OK, you have the shooting, you were there, do you remem-ber if there was an investigation? That is not heavy on detail?

Ambassador SATTERFIELD. And Congressman, I would prefer torespond to you in writing on this.

Mr. LYNCH. Are you refusing to answer?Ambassador SATTERFIELD. No, Congressman, I want to give you

a full answer. I am not able to do that at this time.Mr. LYNCH. I am just looking for a yes or no. Was there an inves-

tigation, yes, if there wasn’t an investigation, no?Ambassador SATTERFIELD. I am not able to confirm the details of

what happened following that incident at the time.


153

Mr. LYNCH. I am not looking for the details. I am just lookingfor the fact of an investigation, did it occur or didn’t it occur?

Ambassador SATTERFIELD. Congressman, I will have to check onthat for you.

Mr. LYNCH. So you don’t know, you don’t remember if there wasan investigation?

Ambassador SATTERFIELD. I cannot recall.Mr. LYNCH. OK.Chairman WAXMAN. Will the gentleman yield to me?Mr. LYNCH. I will yield to the gentleman.Chairman WAXMAN. The committee asked for investigative re-

ports and other documents relating to incidents involving allega-tions of Blackwater’s misconduct which would presumably includeshooting civilians and seeking to cover it up. But virtually nonewere provided. That fact alone casts doubt on the sufficiency of anyState Department investigations into these incidents.

We have had a better response from Blackwater than we havefrom the State Department on getting information. Does that both-er you as much as it bothers me, or do you have to find out wheth-er you feel that way or not?

Ambassador SATTERFIELD. No, Mr. Chairman. I——Chairman WAXMAN. I can’t understand why we don’t get re-

sponses from the State Department.Ambassador SATTERFIELD. We will be responding fully to all of

the requests made both at this hearing and by the committee.Chairman WAXMAN. Well, some of these requests were made in

March, some were requested in June, we are already holding thehearing. We made requests so that we could have them before thehearing, not so that we could get them after the hearing.

I thank the gentleman for yielding.Mr. LYNCH. With all due respect, reclaiming my time, sir.Look, what I am getting at is this. The State Department works

hand in hand with Blackwater, from my own experience in Iraq,in a fairly coordinated team approach in protecting State Depart-ment personnel. The closeness of that relationship between StateDepartment personnel, look, Blackwater is protecting these folksevery single day in a very hostile environment. Friendships de-velop. Reliance develops. It is just not possible, because of the con-flict that is created, that the folks that are being protected, StateDepartment, are going to do an objective job in reviewing the con-duct of the people who are protecting them.

And all I am suggesting is this, please, if you can answer thisquestion. Don’t you think it might provide a little separation anda more objective assessment of Blackwater’s conduct if we had aspecial inspector general reviewing those incidents, so that there bea little space there, they wouldn’t be reviewing the conduct of peo-ple that protect them every day? If you would take a crack at ananswer on that one. Thank you.

Ambassador SATTERFIELD. Congressman, we do take the issueyou raised very seriously, about distance, transparency, objectivityof review of incidents, as well as objectivity of review of rules of op-eration in general, conduct in general. We are looking at that rightnow comprehensively.


154

But to go back to your original question, do we believe it is pos-sible to objectively oversee the operation of security personnel inthe field who protect us? Yes, we believe that is possible. It is exe-cuted every day around the world. There are dismissals from serv-ice made every day in response to incidents. This is done.

But we are looking at the overall picture in Iraq right now. Andwe will consider what steps may be appropriate.

Mr. LYNCH. Here is my problem with that answer. The casewhich I cited, there was a killing of an innocent Iraqi, the RSO inquestion, I think, worked for you and Ambassador Griffin. Theywere part of the review of the incident itself. So just from an objec-tive standpoint, looking at the whole situation, there may havebeen some complicity or some involvement, or, let’s call it neg-ligence even on the part of that individual, and they are now re-viewing the events in question.

So that is all. I would just like some good, hard objective reviewof the conduct here that would not be tainted by these relation-ships. I yield back.

Chairman WAXMAN. Thank you. Blackwater and the private con-tractors have to be responsive to you. But you have to be respon-sive to us. We have the oversight jurisdiction and you have theoversight jurisdiction over Blackwater. We want to know if you areexercising that oversight responsibility.

Ms. Schakowsky.Ms. SCHAKOWSKY. Thank you, Mr. Chairman.I would think that the State Department is very concerned on

whether or not these private contractors, security contractors, areactually helping us achieve our mission, that is, whether they arehelping to win hearts and minds or exactly the opposite.

So what we are seeing is that this is a benign function, all thesevarious incidents. Are they making the job harder? For example,after the Fallujah Four were humiliated and killed in Fallujah, wehad the Battle of Fallujah, where a number of our forces who par-ticipated, a large number, were killed there. The latest incidentthat we had has enraged the Iraqis, but also shut down the GreenZone essentially, so that our diplomats couldn’t leave for a certainperiod of time.

I am just very concerned that all of these things have been vir-tually ignored, and in fact, when it comes to Blackwater, the posi-tion that seems to be taken with a number of different quotes ofe-mails and memos has been, let’s just pay people off and put thisincident behind us. I could go back and quote all these variousthings, but I think you have probably been here and heard that.

I am concerned that you are allowing these private contractorsto hurt our mission in Iraq. And I would like a comment.

Ambassador GRIFFIN. If I may, David. Again, realizing the envi-ronment that we are operating in in Iraq, just this calendar year,Blackwater has been involved in 3,073 missions, protective mis-sions on behalf of the State Department. Let me correct myself.There have been 3,073 country-wide missions by the——

Ms. SCHAKOWSKY. I heard all that. That is the Blackwater talk-ing points. I have heard those.

Ambassador GRIFFIN. This is a DS talking point. The reality is,this year, there have been 6,000 attacks per month going on in


155

Iraq. That is the environment that they are trying to perform theprotective mission in, 6,000 attacks per month.

Ms. SCHAKOWSKY. And I am not questioning the level of violencein Iraq. I am asking, and I will move on, I guess in some ways Iwas commenting that these private security guards who, we areunclear on what kind of oversight we can exert and what you canexert, have been damaging our mission in Iraq.

So let me proceed to that. Under CPA, the Coalition ProvisionalAuthority Order 17, contractors have immunity from the Iraq legalsystem. I heard you say, Ambassador Satterfield, that you weregoing to review, this is 4 years later, the effectiveness of CPAOrder 17. Don’t you think there is prima facie evidence, since onlytwo contractors that I know of have been prosecuted in any waythat we are insufficiently providing oversight?

Ambassador SATTERFIELD. Congresswoman, CPA Order 17——Ms. SCHAKOWSKY. Deals with Iraqi law.Ambassador SATTERFIELD [continuing]. Which is part of Iraqi

law——Ms. SCHAKOWSKY. Right.Ambassador SATTERFIELD [continuing]. Provides immunities not

just for security contractors, but for our armed forces in Iraq, fordiplomatic personnel of all diplomatic and consular missions, notjust that of the United States, in Iraq and for contractors associ-ated with them. It is a very broad mission.

Ms. SCHAKOWSKY. And does it still apply to everyone? They arenot subject to Iraqi law at all?

Ambassador SATTERFIELD. CPA Order 17 provides immunities forthose classes of individuals, military and civilian, diplomatic andnon-diplomatic, operating in Iraq today. But the question you raise,Congresswoman, is broader than the operation of CPA Order 17,and we recognize that.

Ms. SCHAKOWSKY. Correct.Ambassador SATTERFIELD. It deals with issues of jurisdiction and

authority in U.S. domestic law, not just the operation of a piece ofIraqi law that provides immunity to Iraqi prosecution.

Ms. SCHAKOWSKY. Right. And so is it your position that aBlackwater contractor working for the State Department can becourt martialed in the military justice system?

Ambassador SATTERFIELD. The issue of jurisdiction and operationof U.S. domestic law, the reach of U.S. domestic law, over individ-uals who are covered by the operation of CPA Order 17——

Ms. SCHAKOWSKY. No, no——Ambassador SATTERFIELD [continuing]. In certain cases is a ques-

tion being examined now.Ms. SCHAKOWSKY. So almost 5 years later, we are now figuring

out who is subject to what laws?Ambassador SATTERFIELD. This is a broader issue than Iraq,

CPA Order 17 or Blackwater. It is a global issue involving jurisdic-tion.

Ms. SCHAKOWSKY. Do you think it is a problem that almost 5years into, or 41⁄2 years into the war, that only two of the Godknows how many people of the 160,000 we think are now servingin terms of contractors have been formally charged with anything


156

and prosecuted? Don’t you think that is prima facie evidence thatwe are not doing enough?

Ambassador SATTERFIELD. No, Congresswoman, because thatwould require an examination of whether in fact there was a bodyof individuals for whom there was reason to believe prosecutionshould be made. And I am not able to comment on that.

Ms. SCHAKOWSKY. So you would say that perhaps only two peopleout of all those private contractors that have served should becharged with anything?

Ambassador SATTERFIELD. Congresswoman, I am not able tocomment on culpability under U.S. law, existing or——

Ms. SCHAKOWSKY. I am asking you to comment on whether ouroversight structure is sufficient if that has been the outcome.

Ambassador SATTERFIELD. There are significant issues involvingthe clarity and application of U.S. domestic law with respect to cer-tain classes of individuals who operate in environments such asIraq, but not exclusively in Iraq.

Chairman WAXMAN. The gentlelady’s time has expired.Mr. Cummings.Mr. CUMMINGS. Thank you, Mr. Chairman.Gentlemen, first of all, thank you for being with us. Blackwater

has had enormous growth in the size of its Federal contracts.Would you agree, Mr. Satterfield?

Ambassador SATTERFIELD. [No audible response.]Mr. CUMMINGS. Mr. Moser.Mr. MOSER. I have been told that is true. I am really only con-

cerned with the growth of its size with regard to the State Depart-ment. And that operation has grown some.

Mr. CUMMINGS. In 2000, the company had less than $1 millionin Federal contracts, but since then, the company has received over$1 billion in Federal contracts. I consider that incredible growth forany company.

The first State Department contract that Blackwater got wasawarded in June 2004, is that correct?

Mr. MOSER. Yes, that is correct.Mr. CUMMINGS. It was a contract to provide security services to

State Department officials in Iraq. And it was worth over $300 mil-lion, is that correct?

Mr. MOSER. Yes, that is correct.Mr. CUMMINGS. What bothers me is that this contract, and I

know you talked about this a little bit earlier, Mr. Moser, but itwas a no-bid contract.

Mr. MOSER. Yes, it was a sole source award.Mr. CUMMINGS. And according to the Federal procurement data

base, the contract was awarded as a sole source contract withoutany competition on the basis of urgency, is that correct?

Mr. MOSER. On the basis of urgent and compelling, because wewere transitioning from the Coalition Provisional Authority to aState Department entity, that is correct.

Mr. CUMMINGS. And how do we determine, let’s say we have 12companies that can do the same thing. Do you just pick up thephone and say, hey, guys, I think we want to give you this $300million contract? What do you do? All things being equal, urgentsituation, how do you determine? Because, let me tell you some-


157

thing, if you choose Blackwater and I am Company X and I can dothe same thing, and you say, well, we gave it to Blackwater be-cause of urgency, I want to know, well, hey, why wasn’t I in thepool for the urgent group?

Mr. MOSER. Mr. Cummings, that is a very, very good question.As the head of the acquisition activity, we are always concernedabout promoting competition. This one was done for urgent andcompelling reasons. It is something the acquisition activity doesvery reluctantly. At the time when that was done, there was mar-ket research done. We examined the capabilities of four other firmsand made the determination whether they could take on this taskof providing these services.

Realizing that we had done a sole source contract, we workedwith our partners in diplomatic security and awarded on a competi-tive basis the worldwide protective services contract iteration twoin the next year, so that we only had a sole source award for that1 year for urgent and compelling reasons. And as I said earlier inmy remarks, because we were very concerned about this contract,we asked for an independent cost audit to be done on this. This issomething we take very seriously.

Mr. CUMMINGS. Yes, you say the audit was done when?Mr. MOSER. The audit was done actually in January 2005. In

other words, of the current contract award. And we actually nego-tiated down the cost of that contract by about $25 million.

Mr. CUMMINGS. Let me make sure I am clear on this. Are youtrying to tell me that when you did this evaluation, you said therewere four other companies, are you trying to tell me that those fourother companies were not as qualified as this company?

Mr. MOSER. That is correct. Given the urgent and compelling cir-cumstances, we did not feel that they could meet the Government’sneed at that time.

Mr. CUMMINGS. And were there any other companies that youconsidered outside now of the total of five? In other words, youhave Blackwater, who got the contract, $300 million, and then wehave four other companies that weren’t apparently qualified. Iguess I am concerned about this qualified pool. I hear people talkabout pools and who is qualified. And I am trying to figure out whois qualified and how are they qualified, because I can, I mean, Ican imagine there are a lot of people that feel like they have notbeen treated right.

Mr. MOSER. And I agree with that, Mr. Cummings, and that isthe reason why we use the authority within the Federal Acquisi-tion Regulations to use an urgent and compelling reason to awarda contract very sparingly. This is the reason why that when we didthis particular award, we had it reviewed by our procurement exec-utive to make sure, and by our competition advocates, to make surethat we were not unjustifiably taking this action. That is the rea-son why we were so anxious, 1 year later, to award this competi-tively.

Mr. CUMMINGS. It is my understanding that the previous yearthey had a contract for $3 million and then, lo and behold, the nextyear, $300 million. Boy, that sounds like the lottery.


158

Mr. MOSER. I can understand that, too. But I really can’t speakabout any contract that was awarded by the Coalition ProvisionalAuthority.

Mr. CUMMINGS. But would you have looked at those contracts?Would that have been a part of your consideration?

Mr. MOSER. Yes. We would have actually examined those for thepast performance criteria.

Mr. CUMMINGS. And who made the decision? Who made the finaldecision to award it and who signed the contract?

Mr. MOSER. I would have to look. I can’t remember which one ofmy contracting officer’s staff actually signed it. I would have to lookat that contract. But that contracting action has gone through andwe have actually given those documents to the committee. I see mycolleagues on the staff, they have received copies of those severaltimes.

Chairman WAXMAN. Did that go any higher than just your con-tracting officer? This is a pretty serious thing.

Mr. MOSER. Yes, as I said, it was signed by the procurement ex-ecutive of the Department of State, which is not part of the acquisi-tion activity. He is an independent entity. It was also signed by ouracquisitions attorney to make sure that it had full legal review.

Mr. SHAYS. Was this in 2004? Not 2007, not 2006?Mr. MOSER. This was in 2004.Mr. SHAYS. It was in 2004 under Mr. Bremer?Mr. MOSER. No, actually 2004, as the embassy was stood up. In

other words, the 2003 award, I think it was 2003, and this is whereI am not really competent to speak, I think it was made under Mr.Bremer. And I can’t really speak to that. I can only speak to thecontracts the State Department has awarded.

Chairman WAXMAN. May I ask this question of maybe the others,maybe Ambassador Satterfield or Ambassador Griffin would know,maybe you know, you told us who signed it, but who approved it?How high up did it go in the State Department for approval? It isa large contract.

Mr. MOSER. Oh, OK. The head of the acquisition activity signedthe sole source justification. That is the senior executive service of-ficer. It was reviewed by the Deputy Assistant Secretary at thetime who I replaced.

Chairman WAXMAN. Deputy Assistant Secretary?Mr. MOSER. Deputy Assistant Secretary, yes.Chairman WAXMAN. Thank you.Mr. CUMMINGS. I just have one other question, very briefly. Do

you look at a company’s capacity to perform a contract?Mr. MOSER. Yes, we do.Mr. CUMMINGS. And did you look at it in this instance?Mr. MOSER. Yes, we did.Mr. CUMMINGS. Did they have the resources to do this contract

at that time, or did they have to use the $300 million to ramp upto doing it?

Mr. MOSER. No, in fact, Congressman Cummings, we actually al-ways look at the capital requirements in the contract and then lookand see if the contractor, the offeror in this case, because he is notreally a contractor until he has gotten an award, if the offeror has


159

the financial capacity in order to provide the resources that we aregoing to need.

And this is a typical, this is very much a business analysis typedecision. Because what we are looking to make sure is that theyare going to be depending on the next paycheck to come so thatthey can actually keep on going. We never want to put the U.S.Government at risk in that kind of situation. Because in fact, ourbiggest criterion at the end of the day is what risk is the Govern-ment at in terms of the financial arrangements in the contract.

Chairman WAXMAN. Thank you very much.In conclusion—yes?Mr. ISSA. We were going to alternate the time?Chairman WAXMAN. We had Mr. Cummings take the questions.

Do you want to ask a question or two? Do you want a minute?Mr. ISSA. I do. My understanding, Mr. Chairman, was——Mr. SHAYS. Take a minute. He’s given you a minute. Just take

it.Chairman WAXMAN. OK, your questions, in a minute.Mr. ISSA. I will be brief.Chairman WAXMAN. The gentleman is granted a minute.Mr. ISSA. The recent report by Retired General Jim Jones and

Chief Ramsey appears to say in pretty much no uncertain termsthat there are roughly 300,000 police forces throughout Iraq, 85percent of whom are Shia, who are constituted in large amounts bypeople who are not working in the best interests of fairness andjustice in Iraq, and that they have been so infiltrated by peoplewho will in fact kill Sunis and do other things wrong that theyshould be, for all practical purposes, torn down and started overagain.

In that environment, and this is for Ambassador Griffin, whatdoes that mean to anyone, DS or contractor, trying to protect yourpeople when Iraqi police forces appear to be coming on the scene?

Ambassador GRIFFIN. As you can well imagine, it is an extremelydifficult task, as is, and if you are not sure if the people who aresupposed to be supporting your mission are really with you or not,it only makes it more complicated. We recently had an incident inBaghdad in September where one of our convoys that was out todo an advance for a chief of mission motorcade proceeded throughan intersection where the traffic was being held up by a police offi-cial in order to clear the way for our motorcade which was prompt-ly hit by an EFP, an explosively formed penetrator.

Mr. ISSA. The worst of all.Ambassador GRIFFIN. The worst of all. It resulted in three in-

jured Blackwater employees who had to be Medivaced to the com-bat support hospital after the small arms fire ceased, because itwas a complex attack.

So it makes it extremely difficult. And it is part of this environ-ment that I alluded to where you have 6,000 attacks a month andyou don’t always know who is with you and who is against you.

Chairman WAXMAN. Thank you——Mr. ISSA. Final question——Chairman WAXMAN. No, Mr. Issa——Mr. ISSA. Mr. Chairman, the rules of the committee——Chairman WAXMAN. Your time has expired.


160

Mr. ISSA. Mr. Chairman, are we going to have regular order?Chairman WAXMAN. Mr. Shays is recognized for any closing com-

ment he wishes to make. Your time has expired. I am only goingby the rules.

Mr. ISSA. Mr. Chairman—would you yield for a final comment?Mr. SHAYS. No.Let me just thank you, Mr. Chairman, for holding this hearing

and making sure it didn’t focus on an incident we do not yet knowthe facts on. I want to thank our first panel and also our secondand say, as I wrestle with this issue, it seems to me we are reallydebating whether, one, we want contractors or we want the Army.Or a second issue is, do we want the State Department to have itsown protective force that would be paid employees. I think theseare all issues that are valid and we need to have dialog on it.

I want to say to you again, Mr. Satterfield, when I have been inIraq, you have been at the forefront of tremendous sacrifice for ourcountry. Mr. Griffin, our paths didn’t really cross. But I just wantto say to you, Mr. Satterfield, thank you for your service in Iraq.

Again, Mr. Chairman, thank you.Chairman WAXMAN. I just want to conclude by saying, it is inter-

esting how, at the end of the hearing, we come to the recognitionon both sides of the aisle that this is a valid question and an im-portant one, whether we should contract out these kinds of servicesin Iraq or anywhere else. At the beginning of this hearing, all wehad from the other side of the aisle were complaints that weshouldn’t even be holding this hearing.

Now, as far as the State Department is concerned, what we haveheard is that this was anticipated to be temporary. You need toquickly put out a contract, because it was going to be a temporarymatter. Yet the embassy was being built for $600 million. Thisdoesn’t indicate to me that there was going to be a temporary pres-ence in Iraq. It indicates to me that we were planning to be in Iraqand may still be planning to be in Iraq for a very long period oftime.

I can’t understand why a security officer that is hired byBlackwater should be paid two or three times what our commanderin Iraq is paid. It confuses me why we need Mr. Prince to figureout to hire military veterans and give them the training to do thejob that the State Department could do with these military person-nel. I just think no one cared about the money because Blackwaterwas organized and you just paid them an aamount of money andthey did the job.

From my point of view as a chairman of an oversight committee,and I want to work together with Democrats and Republicans, thetaxpayers are not getting their money’s worth, by all the billionsof dollars that have gone to Blackwater and these other private se-curity contractors, when it could have been done a lot cheaper. Andwe are not getting our money’s worth, when we have so many com-plaints about innocent people being shot, and it is unclear whetherthey are actually being investigated by the State Department, be-cause we haven’t had cooperation from the State Department toeven tell us if investigations have been done by them.

So if we are paying more and getting less than what we can getfrom our military, I think that the American people are entitled to


161

ask why, and I still am not satisfied after this whole long day ofhearings, that I have had a good answer to this question.

I thank the three of you very much for being here. We will con-tinue to be in touch with you, because we think you owe us moreanswers and we are going to continue to ask the questions until weget those answers.

The committee stands adjourned.[Whereupon, at 3:39 p.m., the committee was adjourned.][The prepared statements of Hon. Diane E. Watson and Hon. Bill

Sali, and additional information submitted for the hearing recordfollow:]


162


163


164


165


166


167


168


169


170


171


172


173


174


175


176


177


178


179


180


181


182


183


184


185


186


187


188


189


190

Æ
